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University  of  California 

FROM    THE    I.IKKAKY 

DR.     FRANCIS     LIE  HER, 

I'rofessor  of  History  and  Law  in  Columbia  CVllege,  Now  York. 


TKK   GUT   OP 

MICHAEL     REESE, 

-'tin  Frai. 
l  873. 


MUTUAL  BENEFIT 

- 

BUILDING  AND  LOIN  ASSOCIATIONS: 


THEIR 


HISTORY,  PRINCIPLES,  AND  PLAN 
OF   OPERATION; 


TOGETHER  WITH  A 


STATEMENT  OF  THE  BEMFITS  ATTENDING  THEM, 


AND  OF  THE 


Ifetitrrtimt  totem  Stmmrim  unit  tfttglislj 

ALSO, 


A  MODE  BY  WHICH  LIFE  INSURANCE  MAY  BE  ADAPTED 

TO  THE  REQUIREMENTS  OF  THEIR  MEMBERS  ; 

A  FORM  OF    CONSTITUTION,  ETC. 


CHARLESTON: 

WALKER  AND    JAMES 

1852. 


Entered  according  to  Act  of  Congress,  in  the  year  1832,  by 

JOSEPH  WALKER  AND  S.  K.  COX, 

In  the  Clerk's  Office  of  the  District  Court  of  the  United  States,  for  the  District  of 
South  Carolina. 


CHARLESTON: 

STEAM    POWER-PRESS   OF   WALKER   AND   JAMES, 
101,  103  and    105  East-Bay. 


PREFACE. 


THE  Editor  of  this  little  work  acknowledges  him- 
self largely  indebted  to  "  A  Guide  to  Benefit  Build- 
ing Societies,"  by  J.  H.  James,  Esq.,  London,  1849  ; 
and  a  "  Practical  Treatise"  on  the  same  subject,  by 
Wm.  Stone,  Esq.,  London,  1851.  He  has  freely 
used  the  material  furnished  by  these  gentlemen, 
making  such  changes  and  additions  of  his  own 
as  would  adapt  the  present  publication  to  the  char- 
acter and  wants  of  the  Associations  in  this  country. 

These  Societies  occupy  a  prominent  position 
among  the  social  institutions  of  England,  and  but 
require  to  be  better  known  in  order  to  their  more 
general  adoption  in  the  United  States. 

When  starting  them  in  this  city,  about  eighteen 
months  since,  the  writer  had  no  little  difficulty  in 
obtaining  the  information  requisite  to  the  incipiency 
of  such  a  movement,  owing  to  the  absence  of  any 
suitable  work  on  the  subject.  This  desideratum  he 


4  PREFACE. 

has  here  attempted  to  supply.  The  design  of  the 
following  treatise  is  to  give  a  plain  and  practical 
exposition  of  their  principles  and  plan  of  operation, 
and  to  show  how  they  may  be  conducted  to  the 
best  advantage  and  success.  It  is  hoped  it  may 
prove  useful  as  a  manual  to  stockholders,  and  a 
guide  in  the  formation  of  new  Societies,  and  also 
serve  to  diffuse  a  more  correct  and  extended  knowl- 
edge of  the  nature  of  these  truly  valuable  institu- 
tions. 

Charleston,  S.  C.>  Jan.  8,  1852. 


BUILDING  AND  LOAN  ASSOCIATIONS. 


CHAPTER  I. 

HISTORY  AND  DESIGN    OF    BUILDING    AND  LOAN  ASSOCIATIONS. 

THE  present  age,  so  remarkable  in  every  respect  as  an  age 
of  progress,  in  nothing  more  deserves  this  distinction  than  in 
its  many  organized  efforts  to  elevate  and  improve  the  condi- 
tion of  the  humbler  classes  of  society, — to  break  down  the 
aristocracy  of  rank  and  wealth,  and  raise  mankind  to  the  level 
of  a  common  brotherhood. 

We  do  not  refer  to  those  wild  Utopian  schemes  of  commu- 
nism, which,  by  destroying  all  legitimate  rights  and  distinc- 
tions, sap  the  very  foundations  of  social  order  and  prosperity  ; 
but,  to  the  many  means  of  a  sound  and  practical  nature,  that 
look  to  the  right  development  of  individual  character  and  en- 
terprise,— that  hold  forth  to  honest  industry  its  proper  reward, 
and  to  the  lowest  the  hope  of  promotion;  and  which,  by 
relieving  the  poor  of  the  degrading  privations  of  their  lot,  en- 
hance their  comfort,  respectability,  and  usefulness.  Few  exist- 
ing organizations  are  likely  to  contribute  more  to  these  results 
than  Building  and  Loan  Associations. 


6  BUILDING  AND    LOAN  ASSOCIATIONS. 

These  societies,  if  we  have  correctly  traced  their  history, 
originated  in  the  south  of  Scotland.  The  first  institution  of 
the  kind  was  established  at  Kircudbright,  in  1815,  under  the 
immediate  auspices  of  the  Earl  of  Selkirk, — a  gentleman  of 
large  fortune,  and  of  liberal  and  enlightened  views,  who  is 
said  to  have  devoted  no  little  time  and  study  to  the  perfecting 
of  this  truly  noble  and  philanthropic  scheme.  They  thence 
gradually  extended  into  the  manufacturing  districts  of  Eng- 
land, then  into  Wales ;  were  afterwards  established  in  London, 
and  soon  became  general  throughout  Great  Britain.  So  ex- 
tensively have  they  spread  and  multiplied  in  that  country,  as 
now  to  number  (according  to  a  late  report  of  the  Registrar) 
two  thousand  and  fifty  societies,  with  an  annual  income  of 
four  millions  sterling  ;  the  whole  of  which  is  advanced  from 
time  to  time  on  the  security  of  real  property,  chiefly  consist- 
ing of  new  buildings, — thus  conferring  an  immense  benefit  on 
various  branches  of  industry  and  trade.  On  account  of  their 
number,  the  large  amount  of  active  capital  they  employ,  and 
the  very  beneficial  influence  they  exert  upon  the  industrious 
and  middle  classes,  they  have  attracted  the  special  attention 
of  the  British  Parliament,  and  secured  several  enactments  in 
their  favor.  In  the  year  1836,  an  act  was  passed,  affording 
the  most  ample  facilities  for  their  formation  and  control.  The 
preamble  states,  "  that  certain  societies,  commonly  called 
Building  Societies,  have  been  established  in  different  parts  of 
the  kingdom,  chiefly  amongst  the  industrious  classes,  for  the 
purpose  of  raising  by  periodical  subscriptions  a  fund  to  assist 
the  members  thereof  in  obtaining  a  small  freehold  or  lease- 


BUILDING-  AND    LOAN  ASSOCIATIONS.  7 

hold  property ;  and  it  is  expedient  to  afford  protection  and 
encouragement  to  such  societies,  and  the  property  obtained 
therewith."  This  preamble  clearly  shows  that  the  legislature 
were  convinced  of  the  utility  and  importance  of  these  institu- 
tions, and  that  they  deserved  all  the  legal  sanction  and  sup- 
port that  could  be  given  them. 

They  were  introduced  into  this  country  about  ten  or  twelve 
years  since,  and  have  operated  very  successfully  in  several  of 
the  Northern  cities  ;  in  Philadelphia,  whole  districts  have  been 
built  up  through  their  exclusive  instrumentality.  They  have 
recently  been  established  in  Charleston,  Savannah,  and  other 
prominent  places  in  the  South ;  and  we  are  satisfied  that,  upon 
their  principles  becoming  more  thoroughly  understood,  every 
town  or  village  of  any  size,  in  the  land,  will  possess  one  or 
more  of  them.  Three  Associations  have  been  in  existence  in 
this  city  (Charleston,  S.  C.)  but  little  over  a  year,  and  have  in 
that  time  invested  upwards  of  ninety  thousand  dollars  in  real 
estate.  The  expenditure  of  such  a  sum  of  money  upon  this 
species  of  property,  has,  of  course,  very  favorably  affected  it ; 
creating  an  increased  demand,  and  thereby  enhancing  its  value. 
It  has  also  led  to  the  erection  of  a  number  of  new  dwellings, 
furnished  many  families  with  homes  of  their  own,  that  could 
not  otherwise  have  possessed  them,  given  a  considerable  im- 
pulse to  mechanical  enterprise,  and  in  many  other  ways  pro- 
moted the  prosperity  and  welfare  of  the  community. 

The  primary  OBJECT  of  these  Associations,  is  to  enable  every 
man  to  become  his  own  landlord — to  purchase  a  home  for 
himself  and  family,  by  simply  paying  into  a  joint  concern,  for 


8  BUILDING    AND   LOAN  ASSOCIATIONS. 

a  few  years,  but  little  if  any  more  than  would  otherwise  have 
been  expended  in  rent.  By  uniting  the  savings  of  their  indi- 
vidual members,  a  capital  is  created,  and  distributed  into  and 
among  the  hands  that  rear  it,  in  the  form  of  real  estate. 

It  is  evident,  that  many  individuals  combining  together, 
could  make  small  sums  of  money  far  more  productive  than 
these  sums  could  be  made  separately.  When  it  is  considered 
that  a  number  of  persons  save  money  by  the  mere  process  of 
hoarding,  and  without  making  one  farthing  of  interest — that 
money  thus  saved  is  of  no  use  to  any  one  while  the  saving  of 
it  is  in  progress, — and  that  by  the  instrumentality  of  Building 
Societies,  money  is  from  the  very  commencement  kept  actively 
employed,  continually  producing  and  reproducing  at  a  won- 
derful rate  of  increase,  and  yet  afforded  to  the  borrower  on 
more  advantageous  terms  than  by  any  other  kind  of  loan — 
the  usefulness  of  these  Associations  becomes  manifest. 

In  fact,  their  leading  principle  is,  that  "  money  makes  mo- 
ney," if  well  used  ;  and  in  the  following  chapter  the  practical 
working  out  of  this  axiom  will  be  fully  explained  with  refer- 
ence to  these  institutions,  by  which  their  great  utility  and  im- 
portance will  be  more  readily  recognized  and  understood. 


BUILDING    AND   LOAN  ASSOCIATIONS. 


CHAPTER   II. 

THEIR   MODE    OF    OPERATION. 

WE  have  stated  it  to  be  the  aim  of  these  societies  to  enable 
persons  in  the  humbler  ranks  of  life  to  become  owners  of  real 
property,  instead  of  continuing  mere  renters  of  it ;  and  we 
come  now  to  speak  of  the  particular  mode  by  which  this  ob- 
ject is  achieved.  To  accomplish  it  among  persons  of  large,  or 
even  moderate  means,  might  not  be  a  difficult  task ;  but  to 
effect  it  among  the  mass  of  the  industrious  classes,  whose  re- 
sources generally  are  very  restricted,  involved  a  problem  of 
no  easy  solution.  Such  persons  have  hitherto,  to  a  very  great 
extent,  been  shut  out  from  so  desirable  a  privilege,  chiefly  by 
the  difficulty  which  too  frequently  attends  the  isolated  efforts 
of  individuals  to  obtain  an  end  seldom  to  be  reached  but  by  a 
combination  of  labor  and  capital.  Nothing  less,  therefore, 
than  the  association  of  individual  energies  and  means,  and  the 
simultaneous  operations  of  renting  and  purchasing  the  proper- 
ty desired,  can  avail ;  and  this  is  precisely  what  is  proposed 
by  these  societies.  By  the  present  system  of  house-tenancy, 
the  many  pay  rents  for  the  benefit  of  the  few  ;  by  this  plan 
the  many  combine  together  so  as  to  put  the  rents  into  their 
own  pockets. 

Under  ordinary  sales  of  property,  a  large  present  sum  of 
money  is  required.  This  deficiency  could  and  has  been  fre- 
quently met  by  persons  engaged  in  trade ;  who,  having  the 


10  BUILDING    AND   LOAN  ASSOCIATIONS. 

facilities  for  obtaining  an  advance  upon  the  property  pur- 
chased, to  the  extent,  say,  of  two-thirds  of  its  value,  and  pos- 
sessing a  sum  at  their  own  command  sufficient  to  cover  the 
difference,  might,  in  a  reasonable  time,  from  the  future  profits 
of  their  business,  be  able  to  discharge  the  encumbrance.  The 
position  of  a  laboring  man,  however,  is  wholly  different ;  his 
surplus  earnings,  above  the  amount  absolutely  required  for  his 
personal  support  and  that  of  his  family,  are  inadequate  to  the 
purpose.  An  arrangement  of  a  very  different  kind  was  then 
found  to  be  requisite ; — that  of  creating  a  common  fund  from 
the  periodical  contributions  of  individuals,  from  time  to  time 
available,  as  far  as  its  amount  would  allow,  to  loan  to  each 
contributor  a  sum  sufficient  to  buy  for  him  a  house,  or  other 
suitable  property ;  so  that  when  all  the  subscribers  had  been 
either  supplied  with  such  property,  or  with  a  return  of  their 
money  and  their  proportionate  profits  thereon,  the  purchased 
property  of  the  members  would  be  freed  from  the  charge  ne- 
cessarily laid  upon  it  by  the  mortgage  previously  given  to  the 
society,  all  the  members  would  be  released  from  their  res- 
pective engagements,  and  a  dissolution  of  the  society  take 
place ;  it  having  accomplished  the  purposes  of  its  organization. 
As  to  the  details  of  the  plan,  they  may  be  thus  stated  : 

1.  The  Association  is  a  mutual  benefit  and  stock  company. 

2.  Each  share  of  stock  is  one  dollar  a  month,  paid  in  month- 
ly during  the  term  of  the  Association's  existence. 

3.  The  entire  amount  paid  in  each  month  is  put  up  at  a 
monthly  meeting  of  the  stockholders,  and  sold  to  the  highest 
bidder  or  bidders  among  them,  at  a  premium.   This  premium 


BUILDING    AND    LOAN  ASSOCIATIONS.  11 

is  deducted  from  the  gross  amount,  and  the  person  bidding 
receives  the  balance  ;  and  is  required  to  secure  the  Association 
for  the  advance  by  a  mortgage  on  real  estate,  equal  in  value 
to  the  net  sum  which  he  receives. 

4.  A  stockholder  is  allowed  to  bid  for  two  hundred  dollars 
on  each  share  he  holds ;  and  after  he  has  borrowed,  pays,  in 
addition  to  his  monthly  dues  for  shares,  six  per  cent,  per  an- 
num on  the  amount  for  which  he  bids.     This  interest  is  paid 
in  monthly  with  the  shares. 

For  instance :  Suppose  the  capital  stock  of  an  Association  to 
be  one  thousand  shares  ;  at  least  one  thousand  dollars  will  then 
be  paid  in  and  sold  out  each  month.  Suppose  an  individual 
holding  five  shares,  bids  at  a  monthly  meeting  for  the  whole 
amount  at  twenty  per  cent,  premium ;  he  receives  eight  hun- 
dred dollars,  the  net  sum  after  the  premium  is  deducted,  and 
is  required  thereafter  to  pay,  in  addition  to  his  five  dollars 
monthly  for  shares,  six  per  cent,  on  a  thousand  dollars — which 
would  be  sixty  dollars  a  year,  or  five  dollars  a  month.  In 
other  words,  he  pays  five  dollars  monthly  for  his  shares,  and 
the  same  amount  as  interest,  while  the  Association  lasts. 

5.  The  Association  winds  up  when  it  is  able  to  divide  two 
hundred  dollars  to  each  share  of  stock.     The  stockholder  who 
has  purchased  an  advance,  is  debited  in  his  account  with  the 
premium  he  has  bid.     Thus,  if  he  own  five  shares,  and  has 
bid  for  a  thousand  dollars  at  twenty  per  cent,  (as  in  the  case 
supposed,)  he  receives  eight  hundred  dollars,  which,  in  the 
winding  up  of  the  Association,  is  accounted  a  full  settlement — 
the  premium  being  the  clear  profit  of  the  Association. 


12  BUILDING   AND    LOAN  ASSOCIATIONS. 

In  addition  to  the  profit  derived  from  premiums,  the  Asso- 
ciation, by  loaning  out  with  its  other  funds  the  amount  paid 
in  monthly  for  interest,  actually  compounds  interest  twelve 
times  a  year,  while  its  individual  stockholders  are' pay  ing  but 
simple  interest.  By  this  rapid  mode  of  multiplying  money, 
these  societies  are  generally  enabled  to  wind  up  in  from  five 
to  eight  years,  never  exceeding,  as  far  as  we  have  learned,  the 
last  named  period.* 

*  The  details  of  the  plan  may  be  yet  further  understood  by  refer- 
ence to  the  Form  of  Constitution,  appended  towards  the  close  of  this 
work. 


BUILDING    AND    LOAN   ASSOCIATIONS.  13 


CHAPTER   III. 

ADVANTAGES  AND  BENEFITS    OF  THESE  INSTITUTIONS. 

HAVING  described  the  plan  of  Building  Associations,  we 
proceed  to  consider  the  advantages  they  afford  their  individual 
members,  and  the  general  benefits  derived  from  them. 

It  is  evident  that  the  prosperity  of  these  societies  chiefly 
consists  in  the  constant  use  of  their  income  by  borrowers ;  but 
unless  it  can  be  shown  that  superior  advantages  may  be  se- 
cured by  obtaining  an  advance  of  money  in  this  way,  beyond 
any  other,  we  cannot  expect  them  to  be  regarded  by  the  pub- 
lic with  special  favor.  It  will  be  very  readily  seen,  however, 
that  these  superior  advantages  really  exist. 

At  first  sight,  indeed,  it  might  seem  to  be  an  oppressive 
and  usurious  mode  of  loaning  money, — the  borrower  being 
required  to  pay  a  premium  at  the  outset,  and  thereafter  an 
interest  of  six  per  cent.,  not  simply  on  the  amount  he  actually 
receives,  but  the  amount  for  which  he  bids ;  and  this  would 
be  its  character  if  the  borrower  and  lender  were  here  distinct 
parties,  as  is  the  case  in  ordinary  loans.  But  in  this  instance, 
an  individual  borrows  from  a  concern  of  which  he  is  himself  a 
component  part,  and  derives  his  proportionate  profit  from  the 
investment  and  re-investment  of  the  very  premium  and  inter- 
est that  he  pays  for  the  loan.  So  great  is  this  difference  in 
his  favor,  that  borrowing  from  the  Association  even  at  forty 
per  cent,  premium,  (an  extreme  case,)  and  paying  an  interest 


14  BUILDING  AND    LOAN   ASSOCIATIONS. 

beside  of  six  per  cent.,  he  does  not  really  pay  as  much  as  the 
man  who  borrows  in  the  ordinary  way  at  seven  per  cent.* 
To  illustrate  :  An  individual  owning  five  shares  bids  for  a 
thousand  dollars  at  forty  per  cent. ;  this  would  be  four  hun- 
dred dollars  on  the  thousand,  leaving  him  six  hundred  dollars 
net.  For  the  use  of  this  six  hundred  dollars  he  pays  six  per 
cent,  on  a  thousand  dollars,  beside  his  shares,  which  are  five 
dollars  a  month ;  that  is,  he  pays,  in  all,  one  hundred  and 
twenty  dollars  a  year.  Supposing  the  Association  to  continue 
six  years,  (and,  at  the  rate  of  premium  named,  it  is  not  likely 
to  exceed  this  period,)  he  will  have  paid  seven  hundred  and 
twenty  dollars  for  the  use  of  six  hundred. 

Suppose,  on  the  other  hand,  that  an  individual  borrows,  in 
the  ordinary  way,  six  hundred  dollars  at  seven  per  cent,  inter- 
est ;  this  would  be  forty-two  dollars  interest  a  year.  In  six 
years  he  will  have  paid  two  hundred  and  fifty-two  dollars. 
He  then  refunds  the  principal,  making,  in  all,  eight  hundred 
and  fifty-two  dollars  he  pays  for  the  use  of  six  hundred — 
leaving  an  advantage  in  favor  of  the  borrower  from  the  Asso- 
ciation of  one  hundred  and  thirty-two  dollars. 

Which  may  be  thus  stated  : 
An  ordinary  loan  would  require  the  payment 

of  the  principal,  &600 

Six  years'  interest,  at  seven  per  cent.  252 — 852.00 

The  Building  Association  would  require  the 

payment  of  five  dollars  monthly,  for  shares, 

for  six  years,  $360 

*  Seven  per  cent  is  the  legal  rate  of  interest  in  this  State,  (South- 
Carolina  ;)  but  the  comparison  holds  equally  good  as  to  six  per  cent,, 
and  even  five ;  as  may  be  readily  seen  by  a  similar  calculation. 


BUILDING  AND    LOAN   ASSOCIATIONS.  15 

Six  years'  interest  on  one  thousand  dollars,  at 

six  per  cent.,  360—720.00 

Balance  in  favor  of  Association,  $132.00 

The  foregoing  instance,  though  decidedly  in  favor  of  Build- 
ing Associations,  shows,  however,  only  the  actual  payments 
made  by  the  borrower  on  the  sum  advanced,  without  allowing 
anything  for  compound  interest  either  way ;  and  inasmuch  as 
the  yearly  payments  of  interest  on  an  ordinary  loan  are  less 
than  the  instalments  to  the  Association,  the  amount  of  com- 
pound interest  would  be  in  favor  of  the  former,  if  it  were 
assumed  that  the  borrower  could  make  compound  interest  on 
the  small  sums  paid  monthly  to  the  Association.  But  this 
cannot  be  fairly  assumed ;  on  the  contrary,  it  may  reasonably 
be  supposed  that  such  small  sums  of  money  would  from  time 
to  time  remain  idle  and  unproductive,  and  at  the  best  could 
yield  but  a  trifling  advance. 

Another,  and  a  very  great  advantage  is,  that  the  Association 
loans  to  the  full  value  of  the  property  mortgaged ;  and  not 
merely  to  two-thirds  or  three-fourths  of  the  value,  as  in  ordi- 
nary loans.  This  it  is  enabled  to  do,  not  only  because  the 
borrower  begins  at  once  to  pay  back  portions  of  the  principal 
money,  thus  lessening  the  risk,  and  continuing  to  do  so  from 
month  to  month,  by  his  periodical  payments ;  but  also,  because 
the  Association  has  already  received  from  him  a  premium, 
which,  being  its  own  exclusive  profit,  enhances  the  security. 
So  that,  while  it  is  as  safe  in  loaning  to  the  full  value  of  the 
property,  as  in  other  cases  where  but  a  partial  advance  is 
made,  it  confers  a  much  greater  benefit  on  the  borrower  ;  for, 


16  BUILDING   AND    LOAN  ASSOCIATIONS. 

even  if  he  possess  of  his  private  means  an  available  amount 
equal  to  the  third  or  fourth  of  the  purchase-money,  he  is  ena- 
bled to  appropriate  it  to  his  business,  or  in  some  other  way, 
and  by  its  investment  may  be  assisted  in  paying  his  dues  to 
the  Association.  But  how  many  are  there  who  cannot  com- 
mand this  balance  ?  If  a  poor  man  desires  to  purchase  prop- 
erty worth  a  thousand  dollars,  the  utmost  advance  he  could 
obtain  in  the  ordinary  way  would  be  but  six  or  seven  hundred 
dollars  ; — where  are  the  remaining  three  or  four  hundred  dol- 
lars to  come  from  ?  To  him,  such  a  sum  is  an  obstacle  more 
formidable  than  thousands  might  be  to  others.  lie  would 
thus  be  completely  debarred  the  privilege  of  a  purchase,  did 
not  the  Association  remove  the  difficulty  by  advancing  the 
full  amount. 

Perhaps  a  still  more  important  consideration  is,  that  the 
return  payments  are  made  in  small  and  convenient  sums,  paid 
monthly ;  and  not  in  a  bulk,  at  any  one  time,  as  in  ordinary 
loans.  How  many,  after  having  paid  interest  for  years  on  an 
advance,  are  compelled  to  suffer  their  property  to  be  sacrificed, 
from  an  inability  to  meet  the  mortgage  upon  it  at  maturity  ? 
It  is  true,  that  no  one  ought  to  borrow  money  without  con- 
sidering carefully  in  what  way  he  shall  redeem  it,  or  pay  it 
back  again.  If  a  person  be  careless  or  thoughtless  with  refer- 
ence to  this  important  rule,  either  he  or  his  family  are  sure 
sooner  or  later  to  suffer  the  consequences  of  his  imprudence, 
in  the  sacrifice  of  his  property  by  forced  sale,  or  otherwise ; 
but  yet,  the  danger  in  such  a  case  is  too  apt  to  be  overlooked 
•until  the  mischief  is  done.  An  individual  purchasing  proper- 


BUILDING    AND    LOAN  ASSOCIATIONS.  1 

ty  by  means  of  a  loan,  will  find  it  easier  for  the  time  being  to 
pay  six  or  seven  per  cent,  for  the  money  he  has  borrowed  on 
a  mortgage  of  it,  than  ten  or  twelve  per  cent,  of  its  value  in 
the  form  of  rent.  And  in  this  way  he  may  go  on  pleasantly 
enough  for  a  few  years,  keeping  the  interest  regularly  paid  ; 
but  the  time  comes  when  the  principal  money  is  required  by 
the  lender,  which  often  happens  when  it  is  difficult  to  obtain 
the  money.  In  this  way  property  is  often  sacrificed,  or  a  great 
loss  sustained. 

In  a  majority  of  cases  of  mortgages  of  house  property,  the 
mortgagers  are  persons  actively  engaged  in  business,  and  have 
but  little  time  to  devote  to  the  consideration  of  their  private 
affairs  ;  and  if  they  have  time,  it  is  only  occasionally  that  men 
in  such  circumstances  look  forward  to  the  future,  and  after 
they  have  borrowed  money,  set  to  work  to  consider  when  and 
how  they  shall  redeem  it.  The  pressing  occurrences  of  every- 
day life  attract  and  absorb  their  attention.  They  think  that 
"  sufficient  for  the  day  is  the  evil  thereof,"  and  if  they  make 
provision  for  the  payment  of  the  yearly  or  half-yearly  interest, 
they  think  they  have  done  enough,  and  leave  the  rest  to  take 
care  of  itself.  It  does  not  occur  to  them  that  a  mortgage  of 
property  is,  in  fact,  an  absolute  transfer  of  it  to  another  party 
until  the  money  is  repaid ;  that  they  subject  themselves  to 
the  caprice  of  the  lender,  and  to  any  casualty  that  may  unex- 
pectedly occur  to  him,  and  in  all  probability  will  be  called 
upon,  when  they  least  expect  it,  to  repay  the  principal  money. 

We  have  already  stated,  that  persons  holding  property 
under  mortgage  pay  less,  for  the  time,  than  would  bo  required 
2 


18  BUILDINO   AND   LOAN  ASSOCIATIONS. 

for  rent ;  and  if  they  were  provident  enough  to  save  the  dif- 
ference, and  lay  it  by  for  the  purpose  of  redeeming  the  prop- 
erty which  is  not  yet  their  own,  then  they  may  succeed  in 
securing  its  full  possession.  But  if,  on  the  other  hand,  they 
live  at  a  greater  expense  than  before,  and  treat  the  surplus  as 
income  which  they  may  well  afford  to  spend,  and  consider 
themselves  as  living  rent-free,  and  that  the  only  provision 
they  have  to  make  is  for  the  payment  of  the  interest ; — such 
a  course  is  sure  to  dispossess  them  of  the  property  they  had 
fondly  fancied  their  own  ;  and  the  "  evil  day  "  probably  ar- 
rives when  the  unfortunate  victim  of  this  snare  is  advanced  to 
a  time  of  life,  at  which  he  is  less  able  to  cope  with  his  diffi- 
culties and  retrieve  his  position. 

Now  it  is  well  known  that  this  picture  is  practically  true, 
and  of  frequent  occurrence  in  populous  towns  where  the  facili- 
ties for  borrowing  exist.  Some  few,  indeed,  succeed  and  pass 
through  the  enticements  and  difficulties  which  surround  them; 
but  the  majority  fail  in  the  trial,  and  after  various  vicissitudes, 
they  are  often  reduced,  with  their  families,  to  poverty,  and 
their  property  passes  into  more  fortunate  hands.  It  may  be 
said  that  this  is  in  the  nature  of  things,  and  cannot  be  avoid- 
ed ;  but  it  is  evident  that  Building  Associations  are  the  exact 
remedy  for  this  evil ;  by  joining  them  a  person  is  constrained, 
as  it  were,  to  be  provident.  Instead  of  appropriating  any 
surplus  means  to  support  a  more  expensive  style  of  living,  he 
is  compelled  to  apply  them  in  making  good  his  payments  to 
the  Association.  These  payments  being  made  monthly,  he 
has  a  constant  stimulus  to  economy — one  that  he  is  not  likely 


BUILDING    AND   LOAN  ASSOCIATIONS.  19 

to  resist;  for  no  man -will  suffer  his  property  to  be  sacrificed  by 
neglecting  the  regular  payment  of  small  sums  that  would,  in 
a  few  years,  release  it  from  all  encumbrance.  But  on  the  other 
hand,  when  the  payment  of  the  principal  is  to  be  made  in  a 
bulk,  and  at  a  remote  period,  one  is  too  apt,  as  we  have 
shown,  to  neglect  the  proper  preparation  to  meet  it ;  and  be- 
side, he  may,  even  with  the  utmost  foresight  and  prudence,  be 
thrown  into  circumstances  that  would  render  him  unable  to 
pay  a  large  sum  at  one  time,  and  yet  might  not  interfere  with 
his  monthly  payments  to  the  Association. 

While  the  difficulties  incident  to  an  ordinary  mortgage  are 
thus  obviated,  and  a  man  of  family  enabled,  by  the  regular 
appropriation  of  small  amounts  from  time  to  time,  to  become, 
in  a  few  years,  the  owner  of  a  homestead,  and  is  thus  freed 
from  the  consuming  moth  of  house  rent,  and  all  the  evils  of 
mere  tenancy, — the  Association  also  affords  to  those  who  do 
not  desire  to  purchase  dwellings  for  their  own  use,  an  admi- 
rable opportunity  for  safe  and  profitable  investment.  By  let- 
ting out  the  property  to  others,  the  rent  may  be  made  to  pay 
in  part,  if  not  altogether,  their  dues  to  the  Association  ;  and 
by  this  means  they  may  come  into  full  possession  of  it  at  a 
very  trifling  cost.  To  mechanics,  especially,  who  can  build 
more  advantageously  than  others,  the  facilities  thus  furnished 
for  becoming  owners  of  real  estate  are  very  considerable. 

Enough,  we  trust,  has  been  said  to  prove  the  superior  ad- 
vantages to  be  obtained  by  borrowing  money  of  Building 
Associations  on  real  security,  as  compared  with  any  other 
mode  hitherto  in  practice,  and  there  can  be  no  doubt  that 


20  BUILDING    AND   LOAN  ASSOCIATIONS. 

they  will  be  more  frequently  resorted  to,  and  more  thoroughly 
appreciated,  when  their  peculiar  capabilities  are  better  under- 
stood by  the  public.  It  is  evident  that  they  deserve  more 
general  attention  and  support,  and  that  they  are  calculated 
to  prove  extremely  beneficial,  by  encouraging  those  who  are 
inclined  to  save  and  secure  property  for  themselves,  to  perse- 
vere in  economical  and  prudent  habits,  and  by  enabling  them 
to  realize  these  objects  in  an  easy  and  convenient  manner,  the 
attainment  of  which  would  otherwise  prove  very  difficult,  if 
not  altogether  impossible. 

While  such  are  the  advantages  held  forth  to  individual 
borrowers,  the  benefits  which  these  societies  confer  upon  the 
community,  are  by  no  means  inconsiderable.  It  must  be  ad- 
mitted to  be  a  very  important  part  of  political  economy  to 
promote  providence  and  industry  among  all  classes  of  society, 
and  particularly  those  whose  circumstances  can  only  thus  be 
rendered  comfortable,  and  be  attended  with  contentment  and 
independence.  In  this  respect  these  Associations  are  calcula- 
ted to  effect  an  unlimited  amount  of  good,  by  the  encourage- 
ment of  careful  habits  in  the  classes  alluded  to,  and  the  in- 
ducements held  out  to  them  to  become  owners  of  real  proper- 
ty. Creating  among  a  greater  number  a  permanent  interest 
in  the  soil,  and,  consequently,  in  the  institutions  of  the  coun- 
try, they  tend  greatly  to  lessen  that  curse  of  all  large  commu- 
nities— a  fluctuating  and  unsettled  population ;  and  are  subver- 
sive of  any  inclination  to  interfere  with  the  rights  of  property, 
inasmuch  as  their  members  are  themselves  concerned  in  main- 
taining these  rights,  and  the  laws  that  protect  them.  So  that, 


BUILDING    AND    LOAN  ASSOCIATIONS.  21 

in  both  a  moral  and  political  point  of  view,  these  societies 
assume  a  position  of  vital  importance. 

Then,  again,  with  regard  to  their  constitution,  one  very 
important  advantage  is,  that  the  members  have  a  voice  in  the 
management  of  the  business  relating  to  them,  and  have  op- 
portunities, from  time  to  time,  of  hearing  how  the  affairs  of 
the  concern  proceed.  This  feature  secures  for  these  societies 
the  sympathies  of  the  people,  and  is  accordant  with  the  spirit 
of  our  free  institutions.  The  power  thus  given  to  members 
induces  them  to  attend  the  meetings,  and  to  feel  a  decided 
interest  in  what  takes  place.  And  as  the  benefits  of  these 
Associations  are  by  no  means  confined  to  the  laboring  man, 
but  extend  to  persons  in  almost  every  rank  of  life,  the  differ- 
ent classes  of  society  are  in  this  way  brought  together,  and 
having  one  common  object  in  view,  a  bond  of  union  arises 
between  them  which  creates  kindly  feelings  ;  they  are  prepar- 
ed to  receive  assistance  from  each  other,  to  feel  their  mutual 
dependence,  and  a  great  public  good  is  achieved.  For,  nothing 
is  more  calculated  to  moderate,  if  not  altogether  to  prevent, 
the  jealousy  which  too  frequently  arises  from  class  interest, 
and  to  foster  that  mutual  confidence  and  good-will  which  in 
this  country  is  the  great  secret  of  our  contentment,  insuring 
as  it  does  self-reliance  and  the  true  spirit  of  independence, 
than  this  kind  of  combination.  To  all  this  it  may  be  added, 
that  these  institutions  rest  upon  the  strongest  possible  securi- 
ty— that  of  real  estate ;  and .  are  guarded  as  fully  against  all 
contingencies  and  risks  as  any  monied  institutions  can  possi- 
bly be. 


22  BUILDING    AND    LOAN  ASSOCIATIONS. 

Though  so  beneficial  in  their  operation,  yet  the  nature  and 
principles  of  these  societies  are  too  generally  misunderstood ; 
so  that  by  many  they  are  confounded  with  mere  schemes  of 
speculation  and  monopoly.  This  misapprehension  can  only 
be  ascribed  to  that  prejudice  which  prevails  against  anything 
new,  and  which  often  precludes  a  candid  and  careful  exami- 
nation. Every  one  who  has  watched  their  progress,  or  will 
take  the  trouble  to  inquire  into  it,  will  not  fail  to  be  convinced 
of  the  extensive  benefits  they  have  already  conferred ;  and  it 
may  easily  be  foreseen,  that  having  been  once  set  in  motion, 
they  will  move  rapidly  forward  in  their  career  of  usefulness, 
by  their  good  results  commending  themselves  to  public  favor. 


BUILDING  AND   LOAN    ASSOCIATIONS.  23 

CHAPTER    IV. 

DISTINCTION  BETWEEN  AMERICAN  AND  ENGLISH  ASSOCIATIONS. 

Ix  England,  Building  Associations  are  conducted  on  a  plan 
somewhat  different  from  that  adopted  in  this  country  and  ex- 
plained in  a  preceding  chapter.  It  has  been  objected  to  the 
method  of  selling  the  funds  at  a  premium,  that  members  in 
pressing  need  of  money  are  brought  into  competition,  and 
for  the  sake  of  meeting  a  present  emergency  will  submit  to 
extravagant  deductions,  regardless  of  the  result ;  and  to  obvi- 
ate this  difficulty,  societies  in  England  loan  out  the  funds  at 
a  fixed  rate  of  interest,  varying  according  to  the  term  agreed 
upon  for  the  duration  of  the  society ;  a  priority  of  advances 
being  determined  by  rotation  of  membership,  or  of  application, 
or  by  ballot. 

But  it  is  very  questionable  whether  this  plan  is  to  be  pre- 
ferred to  the  one  already  described.  It  is  true  that  the  higher 
the  premium  paid  for  an  advance,  the  greater  must  be  the 
amount  bid  for  to  obtain  any  given  sum,  and  the  monthly 
payments  for  interest  and  shares,  will,  of  course,  be  propor- 
tionably  increased ;  but  when  it  is  considered  (as  has  been 
fully  shown)  that  whatever  rate  of  premium  may  be  paid,  it  is 
scarcely  possible  that  the  borrower  will  exceed  or  even  equal 
the  legal  rate  of  interest  in  an  ordinary  loan,  there  can  be  no 
just  cause  for  complaint.  As  to  his  ability  to  meet  the  month- 
ly payments  accruing  from  a  high  rate  of  premium,  that  is 


24  BUILDING    AND    LOAN  ASSOCIATIONS. 

altogether  his  own  look-out ;  if  he  become  responsible  for  an 
amount  that  he  cannot  regularly  meet,  it  is  not  the  fault  of 
the  principle  upon  which  the  Association  operates,  but  the 
abuse  of  that  principle.  In  this,  as  in  all  other  matters,  a 
man  must  exercise  proper  judgment  and  foresight ;  he  must 
calculate  the  utmost  amount  he  is  able  to  pay  monthly,  and 
not  suffer  his  dues  to  the  Association  to  exceed  that  sum.  He 
should  not,  therefore,  commit  himself  to  the  purchase  of  pro- 
perty before  he  has  borrowed  from  the  Association ;  for,  in 
that  case,  he  might  be  tempted  to  give  a  rate  of  premium  de- 
manding a  larger  monthly  payment  than  he  could  regularly 
meet, — let  him  get  the  refusal  of  property  that  he  desires  to 
purchase,  and  then  if  he  succeed  in  obtaining  an  advance, 
there  will  be  ample  time  between  the  monthly  sale  of  the 
funds  and  the  meeting  of  the  Board  of  Directors  who  deter- 
mine on  securities,  (an  interval  of  several  days  generally 
elapsing,)  to  negotiate  the  purchase. 

Beside,  the  plan  of  loaning  the  money  simply  at  fixed  rates 
of  interest,  or  at  a  certain  bonus,  and  determining  a  priority 
of  advances  by  rotation  or  ballot,  is  attended  with  many 
objections.  It  protracts  the  term  of  the  Association's  existence 
beyond  the  time  of  the  mode  above  mentioned ;  and  by  thus 
prolonging  the  liabilities  of  members,  is  likely  to  produce  dis- 
satisfaction and  discouragement.  It  may  be  said,  that,  in  as- 
sociations conducted  on  the  plan  of  selling  the  funds,  the  premi- 
um may  so  far  decline  as  to  produce  a  like  result ;  but  this  is 
hardly  probable.  There  is  always  a  demand  for  money,  par- 
ticularly in  populous  and  growing  cities,  and  among  that  class 


BUILDING    AND    LOAN   ASSOCIATIONS.  25 

of  persons  that  patronise  these  institutions  ;  and  until  money 
become  a  drug,  and  the  demand  for  it  cease,  the  competition 
and  premium  are  likely  to  keep  up.  At  least,  such  has  been 
the  experience  of  associations  in  this  country ;  several  upon 
this  plan  have  wound  up  with  entire  success,  and  in  no  in- 
stance, as  far  as  we  have  been  able  to  learn,  has  any  failure 
occurred.  It  may  do  for  our  plodding  trans- Atlantic  brethren 
to  determine  the  existence  of  a  society  for  ten,  twelve,  or  even 
fifteen  years ;  but  this  would  not  suit  the  progressive  spirit  of 
our  people ;  they  would  prefer  that  the  Association  accom- 
plish its  work  in  less  time,  even  if  for  the  time  it  cost  them 
more ; — although  in  the  end,  the  borrower  by  this  plan,  even 
at  a  high  rate  of  premium,  pays  much  less  than  by  the  other. 
Nor  can  it  be  shown  that  the  English  mode  will  ensure 
greater  regularity  and  success, — that  by  fixing  the  rate  at 
which  money  is  loaned,  and  thereby  determining  the  duration 
of  the  society,  it  is  more  likely  to  wind  up  in  a  given  time, 
than  where  it  depends  upon  the  fluctuation  and  uncertainty 
of  premium  sales.  A  moment's  reflection  will  show  that  there 
can  be  no  just  claim  of  superiority  in  this  respect;  for  the 
same  cause  that  would  produce  a  decline  of  premium  in  the 
one  case,  would  produce  a  lack  of  borrowers  at  a  high  rate  of 
interest  in  the  other.  Then,  again,  where  no  deduction  of 
premium  is  made,  the  utmost  that  could  be  safely  loaned  on 
property  would  be  four-fifths  of  its  value ;  while,  by  the 
American  plan,  the  full  amount  is  advanced, — a  very  impor- 
tant difference.  Indeed,  after  mature  consideration,  we  doubt 
very  much  whether  the  plan  adopted  in  this  country  could  be 
3 


26  BUILDING    AND  LOAN    ASSOCIATIONS. 

advantageously  changed.  It  is  true,  that  the  difficulty  of 
back-payments  in  entering  an  association  some  time  after  its 
commencement  is  obviating  by  the  permanent  feature  now 
introduced  into  the  English  societies,  or  by  allowing  persons 
to  enter  the  association  at  any  time,  and  allotting  them  an 
advance  or  interest  proportioned  to  the  period  of  their  con- 
nection with  it ;  but  the  remedy  for  this  evil  with  us  would 
be  in  the  formation  of  new  societies,  which,  in  most  cases, 
would  be  amply  provided  for  by  the  increase  of  population. 

But  as  some  may  differ  with  us  in  opinion,  and  prefer  the 
English  plan  to  the  one  here  recommended,  we  proceed  to  lay 
it  in  detail  before  our  readers. 

It  will  be  necessary  for  us  preliminarily  to  observe,  that 
Building  Societies  in  England  are  not  such  in  the  strict  sense  of 
the  term,  or,  rather,  are  not  exclusively  such,  but  more  proper- 
ly Investing  and  Borroiving  Societies ;  embracing  two  dif- 
ferent classes  of  members, — those  who  enter  them  simply  for 
the  purpose  of  saving  a  certain  sum  of  money  at  interest,  by  the 
payment  of  monthly  or  quarterly  contributions ;  and  those 
who  wish  to  borrow  money  to  invest  in  real  estate.  They  are 
based  upon  two  kinds  of  constitution:  namely — the  temporary 
principle,  by  which  the  society  is  calculated  to  exist  only  for 
a  given  period,  beyond  which,  however,  if  the  plan  and  rules 
be  not  properly  adjusted,  its  duration  may  be  considerably 
extended  ;  and  the  permanent  principle,  by  which  the  society 
itself  may  continue  to  exist  for  an  indefinite  time,  but  the 
payments  and  memberships  are  limited  to  a  stated  term  of 
years.  By  the  latter  method  the  capital  of  the  society  is  con- 


BUILDING   AND   LOAN  ASSOCIATIONS.  27 

tinually  flowing  in  and  out,  increasing  or  decreasing  according 
to  the  varying  number  of  shareholders  from  time  to  time  ful- 
filling their  several  cycles  of  payments. 

The  societies  first  established  were  upon  the  temporary 
principle ;  the  number  of  shares,  as  well  as  the  duration  of  the 
society,  being  usually  restricted.  That  is  to  say,  the  members, 
having  entered  the  society,  would  commence  their  monthly 
contributions  of  ten  or  fourteen  shillings  on  a  particular  day, 
and  continue  to  pay  them  until  the  realization  of  the  one  hun- 
dred or  one  hundred  and  twenty  pound  shares  for  each  mem- 
ber, by  the  advance  of  the  capital  of  the  society  to  such  mem- 
bers as  required  it,  and  the  payment  of  interest  as  well  as 
principal  by  them,  so  as  to  insure  such  realization  within  a 
given  period  of  ten  or  fourteen  years,  in  the  manner  more 
particularly  explained  hereafter.  It  was,  however,  ascertain- 
ed that  this  did  not  suit  all  parties,  and  that  the  benefit 
was  chiefly  confined  to  those  who  were  prepared  to  take 
shares,  and  begin  their  periodical  payments  at  the  commence- 
ment of  the  society ;  those  who  might  become  members  after 
the  expiration  of  a  year  or  two  would,  of  course,  be  obliged  to 
purchase  shares  by  paying  up  the  past  subscriptions,  either 
to  the  society,  or  to  one  of  its  original  members.  This  may  be 
more  clearly  understood  by  the  following  illustration : 

We  will  assume  the  ultimate  value  of  the  shares  at  £100 
each,  and  the  monthly  payments  of  a  member  for  each  share 
to  be  ten  shillings.  At  the  end  of  twelve  months,  the  sum 
of  six  pounds  would  have  been  paid  into  the  society  by  each 
shareholder ;  and  consequently  each  share  would  then  be 


28  BUILDING   AND    LOAN   ASSOCIATIONS. 

worth  at  least  six  pounds  with  the  addition  of  compound 
interest  on  the  monthly  payments.  Therefore,  if  a  person 
wished  to  enter  the  society  at  the  end  of  the  first  year,  either 
as  an  invester  or  borrower,  he  would  have  to  pay  rather  more 
than  six  pounds  per  share  for  the  privilege,  and  so  on  in  pro- 
portion at  the  end  of  the  second,  third,  or  fourth  year.  This 
would  be  a  serious  obstacle  in  the  way  of  persons  of  very  nar- 
row means  ;  they  might  be  very  well  able  to  commence  by 
paying  ten  shillings  a  month,  but  not  a  sum  of  six  pounds  or 
more,  according  to  the  number  of  years  the  society  had  b«'ii 
in  existence.  The  regulation  of  some  temporary  societies  do, 
indeed,  do  away  with  this  usual  requirement,  demanding  sub- 
scriptions only  from  the  date  of  the  entry  of  the  member  ; 
but  the  inconvenience  to  persons  joining  late  and  who  are  de- 
sirous of  borrowing,  is  but  little  abated,  inasmuch  as  their  ad- 
vances must  be  necessarily  diminished, — being  equivalent 
only  to  the  value  of  their  future  payments,  thus  reducing  the 
sum  lent  to  a  very  trifling  amount,  inadequate  in  most  cases 
to  the  purposes  desired. 

This  difficulty  occasioned  the  introduction  of  the^m/' 
feature,  by  which  an  individual  is  enabled  to  enter  this  society 
at  any  time,  without  being  subject  to   back  payments,   and 
precisely  on  the  same  footing  with  original  members. 

Another  advantage  claimed  by  the  advocates  of  perma- 
nent societies  is,  that  the  borrower  has  the  privilege  of  choos- 
ing the  period  over  which  he  will  spread  his  repayments  or 
subscriptions, — either  seven,  ten,  twelve,  or  fourteen  years  ; 
and  that  he  can,  therefore,  make  his  arrangements  with  much 


BUILDING   AND   LOAN    ASSOCIATIONS.  29 

greater  precision,  according-  to  his  anticipated  income,  and 
various  other  circumstances  of  which  he  alone  can  form  a  cor- 
rect judgment. 

In  both  of  the  above-mentioned  societies  the  members  or 
shareholders  pay  a  certain  sum  per  month ;  according  to  the 
anticipated  duration  of  the  society,  if  it  be  established  on  the 
terminating  principle  ;  or  according  to  the  period  fixed  for 
the  continuance  of  the  subscriptions,  if  it  be  established  on 
the  permanent  principle. 

The  monthly  payments  in  either  case  should  amount  to 
such  a  sum  as,  at  the  rate  of  compound  interest  on  which  the 
society  is  established,  would  realize  the  value  of  the  share, 
within  the  period  fixed  for  the  duration  of  the  society. 

The  rate  of  compound  interest  on  which  the  society  should 
be  based,  must  depend  on  the  rate  at  which  investing  mem- 
bers will  be  induced  to  invest  their  money.  As  a  general 
rule,  it  may  be  supposd  that  a  sufficient  number  of  persons 
will  be  ready  to  invest  their  money,  at  the  rate  of  five  pounds 
per  cent,  compound  interest,  although  it  is  not  always  the 
case. 

At  that  rate,  the  sum  of  ten  shillings  paid  monthly,  would, 
with  compound  interest  at  Jive  per  cent.,  amount  to  one  hun- 
dred and  twenty  pounds  in  about  fourteen  years*  So  that 
if  the  society  be  formed  with  the  intention  to  pay  the  invest- 
ing members  five  per  cent,  compound  interest,  the  payments 
for  shares  of  one  hundred  and  twenty  pounds  must  be  ten 
shillings  a  month  for  fourteen  years. 

*  The  exact  time  is  13  years,  10  months,  and  21  days. 


30  BUILDING    AND    LOAN  ASSOCIATIONS. 

Then  as  regards  the  borrower,  he  should  be  required  to  pay 
for  the  money  he  receives,  such  a  monthly  subscription  as 
would,  in  the  same  number  of  years,  amount  to  the  sum  the 
invester  is  to  receive. 

Thus,  if  a  borrower  is  to  receive  sixty  pounds  at  the  com- 
mencement of  the  society,  instead  of  one  hundred  and  twenty 
pounds  at  the  conclusion,  or  an  equivalent  sum  at  any  period 
during  its  progress,  and  pays  ten  shillings  monthly  for  four- 
teen years,  lie  will  pay  at  the  rate  of  five  per  cent,  compound 
interest  on  the  sixty  pounds,  and  will,  in  fact,  at  the  termina- 
tion of  the  society,  have  paid  precisely  the  same  amount  as 
the  invester,  who  then  receives  his  one  hundred  and  twenty 
pounds  ;  or,  in  other  words,  each  will  have  paid  eighty-four 
pounds. 

If  the  money  paid  into  the  society  be  constantly  made 
productive,  such  an  association  would  invariably  terminate 
within  the  time  mentioned  ;  but  that  cannot  always  be  the 
case,  and  consequently  these  societies  terminate  in  a  longer 
or  shorter  period,  according  to  circumstances.  On  account  of 
this  uncertainty,  it  has  been  considered  fair  in  some  societies 
to  require  the  borrower  to  pay  a  larger  sum  than  the  invester, 
in  order  that  the  latter  may  receive  the  interest  he  originally 
calculated  on  when  he  entered  the  society.  Then  again,  it 
has  been  found  that  in  many  places,  where  a  large  per  cent- 
age  may  be  obtained  for  money,  parties  are  not  willing  to 
place  it  in  these  societies,  unless  they  obtain  a  higher  com- 
pound interest  than  five  per  cent,  in  return ;  and  the  bor- 
rower is,  therefore,  often  made  to  pay  a  higher  rate  of  interest, 
that  the  invester  may  be  thus  induced  to  enter  the  society. 


BUILDING  AND  LOAN  ASSOCIATIONS.  31 

To  attain  this  object,  it  is  provided  in  some  of  the  associations, 
that  the  borrower  shall  pay  an  additional  sum,  called  re- 
demption money,  beyond  what  the  investor  pays.  For  in- 
stance, if  the  investor  pays  ten  shillings  a  month,  the  borrower 
is  required  to  pay  fourteen  shillings  a  month ;  so  that  the 
society  may,  by  the  additional  payment  of  four  shillings, 
work  out  in  about  ten  years,  instead  of  fourteen  ;  and  the  in- 
vestor, by  this  means,  will  receive  a  higher  rate  of  compound 
interest,  because  his  subscriptions  continue  for  a  shorter  pe- 
riod. In  this  way  a  borrower  from  an  English  society  would 
pay  more,  from  month  to  month,  for  the  same  amount  of 
money,  than  one  borrowing  from  an  American  association ; 
and  would  have  to  continue  his  payments  for  a  much  longer 
period. 

The  foregoing  explanations  apply  more  particularly  to  ter- 
minating societies,  but  they  also  apply  to  permanent  socie- 
ties. The  same  principles  must,  of  course,  control  each  of 
them;  and  the  mode  of  subscription,  advances,  and  realiza- 
tion of  the  shares,  in  the  latter  society,  must  depend  on  ex- 
actly the  same  general  rules,  although  in  a  somewhat  modi- 
fied form. 

In  permanent  societies,  the  amount  of  subscription  to  be 
paid  both  by  investors  and  borrowers,  and  the  length  of  time 
for  which  the  payments  are  to  be  continued,  are  fixed  abso- 
lutely. 

In  these  societies  the  mode  of  advances  is  regulated,  respec- 
tively, in  this  way :  In  a  terminating  society,  where  the  ulti- 
mate value  of  a  share  is,  say,  one  hundred  and  twenty  pounds, 


32  BUILDING  AND  LOAN  ASSOCIATIONS. 

and  calculated  to  wind  up  in  fourteen  years,  (as  in  the  case 
above  mentioned,)  the  members  pay  less  in  actual  money 
than  the  share  subscribed  for  amounts  to  in  the  given  time, 
that  is,  they  pay  but  eighty-four  pounds.  The  members, 
therefore,  receiving  advances  in  the  earlier  years,  would  only 
be  entitled  to  a  portion  of  the  one  hundred  and  twenty 
pounds  on  each  share  subscribed  for,  such  portion  varying  ac- 
cording to  the  period  when  the  share  is  anticipated,  which,  at  a 
given  rate  of  interest,  would  be  the  present  value  of  the  de- 
ferred share.  Thus,  at  the  commencement  of  such  a  society, 
the  sum  advanced  to  a  member  would  be  at  the  rate  of  sixty 
pounds  on  each  share  of  one  hundred  and  twenty  pounds, 
this  being  the  present  equivalent  for  the  deferred  amount. 
The  effect  of  this  arrangement  is  to  give,  as  the  years  roll  on, 
an  increase  of  advance  to  the  members  receiving  it,  proporti- 
onate to  the  amount  of  the  past  subscriptions  paid  and  accumu- 
lated at  compound  interest,  and  to  the  value  of  the  future 
payments  to  the  end  of  the  term.  So  that  the  member  not 
receiving  an  advance  would,  at  the  end  of  the  fourteen  years, 
receive  one  hundred  and  twenty  pounds,  instead  of  sixty 
pounds,  seventy  pounds,  or  ninety  pounds,  at  a  prior  period. 
The  payments  of  all  members,  of  course,  continue  until  every 
invester  or  non-borrower  shall  have  received  the  full  amount 
of  his  share. 

In  a  permanent  society,  where  the  members  receive  the 
full  value  of  their  shares  in  advance,  their  repayments  must, 
at  a  certain  rate  of  interest,  cover  so  much  of  the  sum  as  at 
the  time  of  borrowing  is  the  property  of  the  society,  and  in 


BUILDING  AND  LOAN  ASSOCIATIONS.  S3 

the  given  loan  period,  reimbursed  the  principal  and  interest 
so  required.  Thus,  if  the  full  value  of  the  shares  be  one  hun- 
dred and  twenty  pounds  each,  and  this  entire  amount  be  ad- 
vanced to  a  borrower  at  the  commencement  of  the  society, 
instead  of  only  sixty  pounds,  as  in  the  former  case,  he  would  be 
required  to  pay  monthly  something  over  twenty-one  shillings, 
making  his  total  repayments,  in  the  fourteen  years,  about  one 
hundred  and  eighty  pounds.  This  is  supposing  the  invester 
to  receive  but  five  per  cent,  compound  interest;  of  course, 
•where  a  higher  rate  of  interest  is  allowed,  or  a  shorter  period 
allotted  for  the  duration  of  the  society,  the  payments  are 
proportionably  increased. 

In  the  formation  of  societies  of  this  kind,  it  must  be  deter- 
mined at  what  rate  of  interest,  both  as  regards  investors  and 
borrowers,  a  society  is  most  likely  to  prosper.  On  the  one 
hand,  it  must  not  be  fixed  at  too  low  a  rate  of  interest,  for 
fear  there  should  not  be  a  sufficient  number  of  investures ; 
and,  on  the  other  hand,  it  must  not  be  fixed  too  high,  for 
fear  there  should  not  be  a  sufficient  number  of  borrowers  to 
make  use  of  the  money  as  it  accumulates.  The  last  men- 
tioned evil  not  unfrequently  occurs,  and  to  remedy  it  the 
Ballot  Rule,  as  it  is  called,  is  resorted  to ;  this  provides,  that 
where  there  is  a  balance  beyond  a  certain  amount,  remaining 
uncalled  for,  the  directors  may  require  the  investing  members 
of  the  society  to  withdraiv,  by  ballot,  the  value  of  as  many 
shares  as  will  be  sufficient  to  exhaust  such  portion  of  the  mo- 
ney in  hand  as  they  shall  think  proper.  The  members  on 
whom  the  ballot  falls  will  receive  the  value  of  their  shares, 


34  BUILDING  AND  LOAN  ASSOCIATIONS. 

including  compound  interest  at  the  rate  on  which  the  society 
has  been  formed. 

It  will  thus  be  seen  that  the  English  plan  is  a  complex  one, 
requiring  the  most  careful  calculation,  and  is  liable  to  not  a  few 
difficulties :  the  American  system  is  simpler,  and,  while  quite 
as  successful,  is  more  likely,  we  think,  to  give  general  satisfac- 
tion. It  is  true  that  where  investing  members  are  admitted, 
a  larger  amount  of  money  is  in  hand  at  one  time,  and  a 
greater  number  of  persons  can  be  satisfied  with  an  imme- 
diate advance ;  but  as  we  have  just  shown,  by  an  excess  of 
investors  the  funds  of  the  society  may  become  unproductive, 
and  its  interests  be  injuriously  affected,  notwithstanding  the 
enforcement  of  the  Ballot  Rule.  Beside,  even  though  by  the 
American  plan  an  individual  may  be  compelled  to  v.ait 
awhile  for  an  advance,  yet,  he  is  all  the  time  saving  and 
multiplying  money  that  might  otherwise  be  wasted  or  re- 
main idle ;  and  he  has  further  the  gratification  of  knowing' 
that  he  has  shortened  the  term  for  the  extra  payment  of  in- 
terest, whenever  the  loan  may  be  effected. 

Then  again,  where  inducements  are  held  out  to  persons 
simply  to  invest  their  money  in  these  associations,  the  great 
object  for  which  they  were  originally  instituted  is  apt  to  be 
lost  sight  of, — that  of  encouraging  the  purchase  of  real  estate. 
On  the  other  hand,  where  all,  or  most,  are  compelled  to  be 
borrowers,  as  by  the  American  scheme,  many  would  invest 
their  money  in  this  species  of  property,  who  would  not  other- 
wise become  owners  of  the  soil ;  this  we  regard  a  grave 
consideration. 


BUILDING  AND  LOAN  ASSOCIATIONS.  35 

Should  any,  however,  object  to  the  mode  of  selling  the 
funds,  and  prefer  a  fixed  rate  of  interest,  and  a  disposition  of 
advances  by  ballot,  we  respectfully  recommend  to  them  the 
following  plan,  which,  we  believe,  has  been  already  adopted 
by  one  or  two  associations  in  this  country :  Let  the  pay- 
ment for  shares  be  one  dollar  a  month,  and  each  share  entitle 
the  holder  to  an  advance  of  one  hundred  dollars,  at  six  per 
cent,  interest  per  annum,  paid  monthly.  For  instance,  if  an 
individual  desires  to  obtain  a  loan  of  one  thousand  dollars, 
he  must  own  ten  shares,  for  which  he  will  pay  ten  dollars 
monthly ;  after  he  has  obtained  the  loan  he  will  pay  five  dol- 
lars additional  as  interest,  making  the  total  payment  per 
month  fifteen  dollars,  which  he  continues  until  the  associa- 
tion terminates  (which  it  would  probably  do  in  from  six  to 
seven  years),  and  is  then  released  from  all  further  obligation. 
The  difference  between  this  kind  of  association  and  that 
which  we  have  designated  as  the  American  plan  is,  that  the 
former  allots  but  one  hundred  dollars  as  the  value  of  a  share, 
the  latter  two  hundred  dollars;  the  former  simply  loans  out 
money  at  interest,  the  latter  first  deducts  the  premium  bid 
for  the  loan.  But  it  is  to  be  remembered  that  this  premium 
is  not  likely  to  exceed  or  even  equal  the  difference  in  the 
value  of  the  shares ;  so  that  a  borrower  by  the  former  plan 
pays  about  as  much  for  the  use  of  money  as  one  by  the  latter. 


36 


BUILDING  AND  LOAN  ASSOCIATIONS. 


CHAPTER   V. 

THE    PRINCIPLE    OF    LIFE    INSURANCE    ADAPTED    TO    BUILDING 
ASSOCIATIONS. 

-- 

WE  have  before  shown  that  the  object  of  Building 
Associations  is  to  convert  rent  into  capital,  to  make  every  man 
his  own  landlord,  instead  of  perpetuating  the  system  of  or- 
dinary tenancy,  which  is  attended  with  so  many  evils.  The 
inducements  which  such  institutions  hold  out  to  the  mechanic, 
clerk  and  tradesman,  indeed,  to  every  member  of  society,  are 
equal  to,  if  not  greater  than,  those  of  any  other  institutions 
whatever.  The  great  principle  upon  which  they  are  conducted 
is  at  once  simple  and  effective ;  the  aid  of  mutual  association 
is  combined  with  the  active  use  of  money ;  so  that  the  small 
periodical  subscriptions  of  the  members  are  immediately 
made  convertible  to  their  individual  benefit,  and  under  regu- 
lations peculiarly  suited  to  their  pecuniary  means.  The 
economy  of  the  plan,  too,  is  as  complete  as  the  associated 
perseverance  of  individuals  can  make  it ;  and  so  long  as  the 
personal  exertions,  continuing  health,  and  monetary  resources 
of  the  members  will  allow,  no  serious  impediment  can  arise 
in  well  constituted  societies  to  prevent  the  consummation  of 
the  intended  objects.  The  tenure,  however,  of  human  life  is 
so  precarious ;  the  enjoyment  of  uninterrupted  health  and 
the  means  of  profitable  employment  to  the  most  fortunate  of 
us,  so  uncertain,  that  it  would  be  presumptuous  to  rely  alone 


BUILDING  AND  LOAN  ASSOCIATIONS.  3*7 

upon  these  unstable  helps.  Hence,  we  are  constrained  to  im- 
press upon  the  attention  of  our  readers,  upon  the  advocates 
and  supporters  of  the  excellent  principle  of  Building  Associa- 
tions, the  necessity  and  advantage  of  completing  the  scheme 
of  social  and  prudential  economy,  by  superadding  the  security 
of  Life  Insurance,  which  alone  can  perfect  their  good  work. 

It  has  been  argued  that  every  man,  who  can  by  any  means 
afford  to  do  so,  should  insure  his  life  as  a  future  provision  for 
his  family  when  deprived,  by  death,  of  his  assistance.  This 
argument  has  still  greater  force  with  respect  to  Building  and 
Loan  Associations;  because,  an  individual  borrowing  from 
one  of  these  societies  secures  a  home  for  his  family  in  the 
event  of  his  death,  and,  if  he  lives,  enjoys  its  occupancy  and 
possession  with  them.  He  could  personally  derive  no  advan- 
tage whatever  from  a  mere  insurance  of  his  life,  and  his 
family  would  be  benefitted  only  by  the  contingency  of  his 
premature  death ;  but  by  this  plan  both  may  be  greatly  ad- 
vantaged during  his  lifetime. 

Should  a  borrower,  however,  happen  to  die  before  the  ter- 
mination of  the  society,  his  family  would  be  bound  to  con- 
tinue the  monthly  payments,  or  suffer  the  sacrifice  of  the  pro- 
perty ;  in  the  one  case  a  burdensome  tax  would  be  imposed 
upon  them,  in  the  other  a  heavy  loss  would  be  sustained. 
In  England,  this  difficulty  is  completely  obviated  by  the  fol- 
lowing very  simple  arrangement,  which  we  should  be  very 
happy  to  see  introduced  into  this  country : 

When  a  member  of  one  of  these  associations  receives  the 
value  of  his  shares  in  advance,  on  the  security  of  his  house  or 


38  BUILDING  AND  LOAN  ASSOCIATIONS. 

land,  lie  applies  to  any  prominent  Life  Insurance  Company, 
and  they  grant  him  a  policy  by  which,  for  a  very  trifling 
yearly  or  half-yearly  premium,  they  engage  to  pay  the  whole 
of  his  monthly  dues,  from  the  time  of  his  death,  should  he 
die  before  his  payments  cease,  until  the  association  winds  up, 
and  his  property  is  fully  redeemed  ;  so  that  his  family  will 
have  it  freed  from  all  future  charges,  and  he  will  have  the 
satisfaction  of  leaving  them  unencumbered  by  the  burden. 
The  cost  of  obtaining  this  invaluable  security  is  so  small  as 
to  make  it  but  a  very  slight  addition  to  the  monthly  pay- 
ments. 

It  would  be  greatly  to  the  interest  of  Life  Insurance  Com- 
panies in  this  country  to  adopt  the  same  accommodating 
regulations  with  reference  to  the  numerous  Building  Associa- 
tions that  are  growing  up  among  us.  The  risk  is  comparatively 
a  very  light  one ;  an  insurance  need,  in  no  case,  extend  over 
eight  or  ten  years,  for  an  association  is  not  likely  to  continue 
even  as  long,  and  of  course  the  hazard  is  much  less  tlian 
where  an  unlimited  insurance  is  given.  Beside,  in  the  event 
of  the  death  of  the  stockholder,  the  insurance  company 
is  responsible  only  for  his  monthly  instalments,  and  not 
for  any  largo  sum  at  one  time ;  so  that  the  encroachment 
upon  its  active  capital  would  be  scarcely  felt. 

In  addition,  such  an  arrangement  would  greatly  extend 
the  operations  of  insurance  companies.  For,  if  the  present 
ownership  of  a  house  be  highly  valuable  to  a  man  of  family, 
there  will  be  but  little  difficulty  in  convincing  him  of  the  ne- 
cessity of  securing  it  to  his  children  in  the  event  of  his  un- 


BUILDING  AND  LOAN  ASSOCIATIONS.  39 

timely  death ;  and,  therefore,  in  proportion  to  the  purchase  of 
property  by  the  trading  and  industrious  classes,  so  will  the 
business  of  Life  Insurance  be  augmented,  a  fact  which  ought 
to  be  borne  in  mind  by  those  who  have  the  conduct  of  such 
institutions. 

We  have  said  thus  much  on  this  particular  subject,  be- 
cause we  esteem  it  one  of  great  importance,  and  attention 
has  not  before,  to  our  knowledge,  been  directed  to  it  in  this 
country.  It  will  be  admitted,  that  in  view  of  the  great  un- 
certainty of  human  life,  and  our  positive  liability  to  be 
snatched  away  at  any  moment,  without  respect  to  our  cir- 
cumstances, age  or  state  of  health,  it  is  a  high  moral  duty  for 
those  who  have  others  dependent  upon  them,  to  provide 
against  the  contingency  of  premature  death ;  but  no  man, 
joining  a  Building  Association  and  purchasing  a  house 
through  its  means  by  way  of  mortgage,  to  be  redeemed  by 
periodical  payments  spread  over  a  series  of  years,  can  secure 
the  safety  of  his  position,  unless  he  insure  his  life  to  an 
amount  sufficient  to  cover  his  liability,  should  death  happen 
— as  it  may  to  the  most  robust  and  healthful — before  his 
payments  are  fully  discharged.  We  therefore  say,  that  it 
would  greatly  contribute  to  the  success  of  Building  Associa- 
tions collectively,  and  to  the  individual  prosperity  of  their 
members,  if  their  conductors  would  form  a  business  connec- 
tion with  some  respectable  Life  office,  and  thus  secure 
advantages  to  be  obtained  only  by  the  mutual  co-operatin 
of  these  excellent  institutions. 


40  BUILDING    AND    LOAN  ASSOCIATIONS. 

The  cost  of  insurance,  should,  of  course,  be  made  as  low 
as  possible ;  and  as  the  liability  lessens  from  year  to  year, 
the  premium  should  be  proportionably  graduated  and  re- 
duced. 


BUILDING  AND    LOAN    ASSOCIATIONS.  41 


WE  here  append  a  FORM  or  CONSTITUTION  for  an  Associa- 
tion on  the  American  plan  ;  also,  a  PLAN  OF  BOOK-KEEPING 
adapted  to  these  Societies ;  a  set  of  TABLES,  showing  the  ope- 
ration of  the  Association  from  month  to  month,  and  the  time 
required  to  wind  up  at  certain  average  rates  of  premium, 
varying  from  twenty  to  fifty  per  cent. ;  together  with  various 
BLANKS,  &c.,  &c.,  all  of  which  will  be  found  very  useful  in 
the  formation  of  new  societies. 


A  FORM  OF  CONSTITUTION 

F»R    A 

BUILDING  AND  LOAN  ASSOCIATION. 


ARTICLE   I. 
Title  and  Object. 

THIS  Association  shall  be  entitled  the Building 

and  Loan  Association,  and  shall  have  for  its  object  the  accu- 
mulation of  a  fund,  by  the  monthly  subscriptions  or  savings  of 
the  members  thereof,  to  assist  them  in  procuring  for  them- 
selves such  real  estate  as  they  may  deem  desirable. 
4 


42  BUILDING   AND   LOAN   ASSOCIATIONS. 

ARTICLE   II. 

Members. 

SECTION  1.     The  members   of  this  Association  shall  be 

male  and  single  female  residents  of ,  of  twenty-one 

years  of  age  and  upwards.  Married  females  and  minors  may 
hold  property  in  the  Association  by  trustees,  and  not  other- 
wise. 

SECTION  2.  Each  stockholder,  for  each  share  of  stock  by 
him  or  her  held,  shall  pay  the  sum  of  one  dollar,  in  par  funds 
on  subscribing,  and  the  same  amount  on  the  first  day  of  each 
and  every  month  thereafter,  (unless  such  day  occur  on  Sun- 
day, in  which  event  the  payment  to  be  made  the  day  previ- 
ous,) to  the  Treasurer,  or  such  other  person  or  persons  as 
shall,  from  time  to  time,  by  the  laws  and  regulations  of  the 
Association,  be  authorized  to  receive  the  same,  until  the  value 
of  the  whole  stock  shall  be  sufficient  to  divide  to  each  share  of 
stock  the  sum  of  two  hundred  dollars. 

SECTION  3.  When  each  stockholder,  for  each  and  every 
share  of  stock  by  him  or  her  held,  shall  have  received  the 
sum  of  two  hundred  dollars,  then  this  Association  shall  deter- 
mine and  close  ;  provided,  always,  that  any  stockholder  having 
obtained  an  advance,  in  the  manner  prescribed  under  Article 
the  eighth,  shall  be  debited  in  his  account  with  the  premium 
paid  thereon. 

SECTION  4.  Should  any  stockholder  fail  to  meet  his  or  her 
dues,  as  often  as  the  same  shall  be  payable  as  aforesaid,  he  or 
she  shall  forfeit  and  pay  the  additional  sum  of  ten  cents  for 


BUILDING   AND    LOAN    ASSOCIATIONS.  43 

every  such  failure,  and  for  each  dollar  thus  unpaid  ;  the  same 
to  be  charged  with  the  monthly  dues. 

SECTION  5.  Should  any  stockholder  neglect  or  refuse  to 
pay  his  or  her  monthly  dues  or  fines,  for  more  than  three 
months,  he  or  she  shall  receive  from  the  Treasurer  the  amount 
of  dues  actually  paid,  with  no  allowance  for  interest  thereon, — 
first  deducting  all  fines  and  arrearages,  with  his  or  her  pro- 
portionate part  of  any  losses  and  expenses  sustained — and 
thence  cease  to  be  a  member  of  this  Association. 

SECTION  6.  Should  any  stockholder,  not  having  received 
an  advance,  wish  to  withdraw  from  the  Association,  he  or  sho 
shall  be  entitled  to  receive  from  the  Treasurer  the  amount  of 
dues  actually  paid,  first  making  the  deductions  provided  for 
in  the  fifth  section  of  this  Article  ;  provided,  however,  that  no 
stockholder,  wishing  to  withdraw,  give  less  than  one  month's 
notice  to  the  Directors,  of  such  intention. 

Transfer  of  stock  may  at  any  time  be  made  in  the  presence 
of  the  Treasurer,  attested  by  his  signature  ;  but  no  such  trans- 
fer shall  be  valid,  until  all  arrearages  or  fines  that  may  be  due 
upon  said  stock  shall  have  been  fully  discharged ;  such  trans- 
fer must  be  made  at  least  thirty  days  before  an  election  to 
entitle  the  holder  thereof  to  vote. 

SECTION  7.  In  the  event  of  the  death  of  a  member,  who 
has  received  no  portion  of  his  or  her  stock  in  advance,  the 
heirs  or  legal  representatives  of  the  deceased  may  continue 
his  or  her  relation  to  the  Association  ;  or,  should  they  prefer  it, 
they  shall  be  entitled  to  receive  from  the  Treasurer  the  amount 
he  or  she  may  have  paid  upon  his  or  her  shares  ;  first  deduct- 


44  BUILDING    AND    LOAX  ASSOCIATIONS. 

ing  any  charges  for  fines,  arrearages,  or  proportion  of  losses 
and  expenses  sustained. 

SECTION  8.  No  stockholder  shall  hold  in  his  or  her  own 
right,  more  than  twenty  shares.* 

SECTION  9.  Each  stockholder,  for  each  and  every  share  of 
stock  by  him  or  her  held,  either  in  their  own  right  or  as  trus- 
tee, shall  be  entitled,  when  personally  present  at  an  annual 
election,  or  special  meeting,  to  one  vote,  for  the  election  of 
officers,  and  other  purposes. 

SECTION  10.  Each  member,  upon  subscribing  for  a  share 
or  shares,  and  making  the  first  monthly  payment  on  the  same, 
shall  be  entitled  to  a  certificate  of  such  share  or  shares,  specify- 
ing the  number  and  amount  thereof  respectively,  signed  by 
the  Treasurer,  and  countersigned  by  the  President ;  which 
certificate  shall  be  evidence  of  his  title  thereto. 

SECTION  11.  Each  stockholder  shall  sign  this  Constitu- 
tion ;  thereby  obligating  himself  or  herself  to  pay  punctually 
their  monthly  dues,  interest  and  fines,  and  to  fulfil  all  other 
requisitions  herein  contained. 

ARTICLE   III. 
Officers. 

The  officers  of  this  Association  shall  be  a  President,  Trea- 
surer, Secretary,  and  four  Directors,  exclusive  of  the  President, 
(who  shall  be  ex-officio  a  member  of  the  Board,) — all  of  whom 

*  The  object  of  this  provision  is  to  make  the  benefits  of  the  Associ- 
ation as  diffusive  and  general  as  possible,  and  to  prevent  anything 
like  speculation  or  monopoly. 


BUILDING    AND    LOAN    ASSOCIATIONS.  45 

must  be  stockholders.  They  shall  be  elected  at  the  annual 
meeting  of  the  stockholders,  on  the  evening  of  the  first  day  of 

,  in  each  and  every  year  ;   provided,  such  clay  do  not 

occur  on  Sunday,  in  which  case  the  election  shall  be  held  on 
the  evening  of  the  previous  day.  A  majority  of  all  the  votes 
represented  or  present  shall  determine  an  election. 

Should  any  officer  die,  or  resign  in  the  interim  between  one 
annual  election  and  another,  the  Board  of  Directors  shall  have 
power  to  supply  the  vacancy. 

ARTICLE   IV. 

President. 

It  shall  be  the  duty  of  the  President  to  preside  at  all  meet- 
ings of  the  Association,  and  of  the  Board  of  Directors  ;  to  pre- 
serve order ;  to  sign  all  drafts  on  the  Treasurer,  when  ordered 
by  the  Board  of  Directors  ;  and  to  perform  all  other  duties 
usually  pertaining  to  his  office. 

He  shall  have  power,  with  the  concurrence  of  two  of  the 
Board  of  Directors,  to  call  a  special  meeting  of  the  Association 
whenever  he  may  deem  it  advisable. 

ARTICLE    V. 

Treasurer. 

It  shall  be  the  duty  of  the  Treasurer  to  receive  all  monies 
paid  into  the  Association ;  and  to  pay  all  orders  drawn  upon 
him  by  authority  of  the  Board  of  Directors,  when  signed  by 
the  President  and  countersigned  by  the  Secretary.  He  shall 


46  BUILDING   AND   LOAN  ASSOCIATIONS. 

receive  and  hold  in  trust,  for  the  Association,  all  bonds,  mort- 
gages, policies  of  insurance,  and  other  papers  in  connection 
with  property  upon  which  money  is  loaned,  first  giving  his 
receipt  therefor  to  the  Secretary.  It  shall  be  his  duty,  and 
he  is  hereby  empowered,  to  give  releases  and  acquittance  for 
all  sums  of  money  paid  to  the  Association  upon  any  bond, 
note,  mortgage,  or  other  security,  and,  if  necessary,  acknowl- 
edge satisfaction  of  the  same  on  record.  He  shall  keep  ac- 
curate accounts  with  the  stockholders,  and  of  all  monies  paid 
into  the  Association.  His  books  shall  be  subject  to  the  in- 
spection of  the  Board  of  Directors  ;  and  he  shall  be  prepared, 
at  all  times,  to  inform  the  members  of  the  state  of  their  ac- 
counts, and  at  the  annual  meeting  furnish  a  detailed  state, 
ment  of  the  finances  of  the  Association.  He  shall  give  satis- 
factory bonds  for  the  faithful  performance  of  his  duties ;  shall 
receive  such  compensation  for  his  services  as  the  Board  of 
Directors  may  determine  ;  and,  at  the  expiration  of  his  term 
of  office,  deliver  over  to  his  successor  all  monies,  books,  and 
papers  in  his  possession  belonging  to  the  Association. 

ARTICLE    VI. 
Secretary. 

It  shall  be  the  duty  of  the  Secretary  to  keep  correct  minutes 
of  the  ^proceedings  of  the  Association,  and  of  the  Board  of 
Directors,  and  record  the  same  in  a  book,  or  in  books,  pro- 
vided for  the  purpose.  He  shall  attest  all  orders  drawn  on 
the  Treasurer  for  the  payment  of  money,  under  the  authority 


BUILDING   AND  LOAN   ASSOCIATIONS.  47 

of  the  Board  of  Directors  ;  and  notify  the  Directors  and  stock- 
holders of  their  monthly  and  annual  meetings,  by  advertise- 
ment in  one  or  more  newspapers,  at  the  expense  of  the  Asso- 
ciation. He  shall  have  charge  of  all  books  and  papers  belong- 
ing to  the  Association,  except  such  as  are  entrusted  to  the 
Treasurer,  and  deliver  up  the  same,  in  good  condition,  to  his 
successor  in  office. 

ARTICLE  VII. 

Directors. 

SECTION  1.  It  shall  be  the  duty  of  one  or  more  of  the 
Board  of  Directors  to  meet  statedly  on  the  first  evening  of 
each  and  every  month,  (at  such  place  as  the  Board  may  ap- 
point), with  the  stockholders,  to  dispose  of  the  funds  accord- 
ing to  the  Constitution,  and  to  conduct  the  business  of  the 
Association  generally. 

SECTION  2.  They  shall  hold,  on  the  fourth  day  after  the 
monthly  meeting,  a  special  meeting,  and  other  meetings  as 
often  as  may  be  necessary,  for  the  consideration  of  securities 
offered ;  and  shall  be  empowered  to  appoint  a  Solicitor  for 
the  Association,  whose  business  it  shall  be  to  examine  all 
titles  and  draw  up  all  papers  in  connection  with  said  securities. 
And  in  no  case  shall  an  order  be  drawn  on  the  Treasurer  for 
an  appropriation,  until  the  necessary  searches  in  the  courts  of 
record  shall  have  been  made,  and  the  Solicitor  certifies  to 
the  satisfactory  character  of  the  security  offered. 

The  charge  for  investigating  titles,  and  preparing  all  neces- 


48  BUILDING    AND   LOAN  ASSOCIATIONS. 

saiy  mortgage  deeds  and  instruments  in  favor  of  the  society, 

shall  not  in  any  case  exceed  the  sum  of ,unless  under  special 

circumstances,  when  the  fee  shall  be  determined  by  the  Di- 
rectors. The  Solicitor's  charges  shall  be  paid  by  the  mem- 
bers, on  whose  account  they  are  incurred,  or  deducted  out  of 
the  money  they  may  be  entitled  to  receive  for  any  share  or 
shares  in  advance,  in  the  mode  hereafter  prescribed. 

SECTION  3.  A  majority  of  the  Board  of  Directors  shall 
constitute  a  quorum.  They  shall  be  empowered  to  fill  all 
vacancies  that  may  occur  in  their  number,  and  to  adopt  any 
regulations  for  their  government  not  disagreeing  with  this  Con- 
stitution. 

SECTION  4.  They  shall  from  time  to  time  inspect  the  books 
and  accounts  kept  by  the  Treasurer,  and  shall  order  a  full 
statement  of  the  affairs  of  the  Association  to  be  annually  prepar- 
ed by  that  officer  at  least  seven  days  before  the  annual  general 
meeting  of  the  members,  at  which  meeting  such  statement 
shall  be  submitted,  after  having  been  first  audited  and  signed 
by  three  members  of  the  Association,  selected  by  the  Board. 

SECTION  5.  Any  order  on  the  Treasurer  must  be  sanction- 
ed by  a  majority  of  the  Board,  and  signed  by  the  President 
and  Secretary. 

ARTICLE    VIII. 
Advances. 

SECTION  1.  Each  stockholder,  for  each  and  every  share  of 
stock  he  or  she  may  hold  in  the  Association,  shall  be  entitled 


BUILDING   AND   LOAN  ASSOCIATIONS.  49 

to  purchase  an  advance  of  stock  of  two  hundred  dollars,  and 
no  more ;  provided,  however,  that  no  stockholder  shall  re- 
ceive an  advance  to  the  amount  of  more  than  one  thousand 
dollars  at  any  one  monthly  meeting,  if  any  other  stockholder 
present,  not  having  received  an  advance,  shall  bid  for  it  at  an 
equal  premium. 

SECTION  2.  The  amount  paid  into  the  treasury  each  month, 
shall,  at  the  monthly  meeting  of  the  members,  be  sold  to  the 
highest  bidder  or  bidders  among  them ;  provided  the  same 
be  not  sold  under  par,  and  be  secured  by  real  estate  fully 
equal  in  value  to  the  net  sum  advanced.  Should  it  so  occur 
that  the  funds  of  the  Association  remain  unproductive  and 
uncalled  for  for  the  space  of  two  months,  the  Directors  are 
authorized  to  loan  what  may  be  on  hand  to  others  than 
stockholders,  if  it  be  safely  invested,  and  repaid  within  one 
year. 

SECTION  3.  Any  stockholder  taking  an  advance,  shall  al- 
low to  be  deducted  the  premium  offered  by  him  or  her  for  the 
same  ;  and  shall  secure  the  Association  for  such  advance,  by 
bond  and  mortgage,  and  policy  of  insurance,  renewed  annual- 
ly at  his  or  her  expense.  He  or  she  shall  further  pay  all 
costs  that  may  accrue  for  examining  titles,  drawing,  acknowl- 
edging, recording,  and  releasing  all  papers  in  connection  with 
said  security. 

SECTION  4.  For  each  advance  of  two  hundred  dollars 
made  to  a  stockholder,  one  share  of  stock  shall  be  assigned  as 
collateral  security.  In  case  of  failure  to  offer  sufficient  secur- 
ity for  an  advance  within  one  month  from  the  date  of  pur- 


50  BUILDING    AND  LOAN    ASSOCIATIONS. 

chase,  the  month's  interest  shall  be  charged  to  said  purchaser, 
together  with  all  costs  and  charges  for  the  examination  of 
titles,  and  his  or  her  right  to  such  purchase  cease. 

SECTION  5.  Any  stockholder  taking  an  advance,  shall 
pay  to  the  Treasurer,  in  addition  to  his  or  her  monthly  dues 
for  shares,  one  dollar  per  month  for  each  share  on  which 
such  advance  is  made,  or  at  the  rate  of  six  per  cent,  per  an- 
num on  the  whole  amount,  including  the  premium. 

SECTION  6.  No  stockholder  shall  be  entitled  to  an  ad- 
vance who  is  in  arrears  to  the  Association,  and  no  property 
taken  as  security  for  an  advance  out  of  the  limits  of . 

SECTION  7.  Should  any  stockholder,  having  received  any 
portion  of  his  or  her  stock  in  advance,  neglect  or  refuse  to  pay 
any  or  all  of  his  dues  to  the  Association,  for  three  successive 
months,  then  the  Directors  may  compel  payment  of  principal 
and  interest  by  instituting  proceedings  on  the  bond  and 
mortgage,  according  to  law. 

When  any  sale  shall  take  place  of  any  property  mortgaged 
to  the  Association,  the  Directors  shall  have  power  to  retain 
and  apply  so  much  of  the  purchased  money  as  would  be  re- 
quired to  redeem  the  property,  pursuant  to  the  provisions 
contained  in  the  ninth  Article  of  this  Constitution,  together 
with  all  other  payments,  monies,  and  expenses  due  to  the 
Association,  and  shall  pay  the  surplus  thereof  to  the  mort- 
gagor. 

SECTION  8.  In  the  event  of  the  death  of  a  stockholder 
who  has  received  any  portion  of  his  or  her  stock  in  advance, 
the  heirs  or  legal  representatives  of  the  deceased  shall  be  en- 


BUILDING  AND  LOAN  ASSOCIATIONS.  51 

titled  to  continue  his  or  her  relation  to  the  Association,  the 
proper  change  of  name,  &c.,  being  first  made  in  the  security 
papers ;  or,  should  they  not  be  able  or  willing  to  do  this, 
then  the  Directors  shall  act  as  in  the  case  above  specified, 
with  this  difference — the  heirs  or  legal  representatives  of  the 
deceased  being  entitled  to  receive  the  actual  amount  he  or 
she  may  have  paid  on  his  or  her  shares,  first  making  any  de- 
duction for  fines,  arrearages,  or  proportion  of  losses  and  ex- 
penses sustained,  with  which  he  or  she  may  be  chargeable. 


ARTICLE   IX. 

Sale,  Substitution,  or  Release  of  Mortgages. 

SECTION  1.  Should  any  stockholder,  who  has  executed  a 
mortgage  to  the  Association,  be  desirous  of  selling  the  mort- 
gaged property,  subject  to  the  mortgage,  he  or  she  shall  be  at 
liberty  so  to  do,  with  the  consent  of  the  Directors,  upon  first 
duly  transferring  the  shares  secured  by  said  mortgage  to  the 
intended  purchaser  ;  and  upon  such  transfer  being  completed, 
and  all  arrears  due  to  the  Association  from  the  mortgagor 
being  paid,  and  the  conveyance  to  the  purchaser  executed, 
such  purchaser  shall  thenceforth  become  liable  to  pay  all  the 
monthly  dues  and  interest  payable  in  respect  of  such  shares, 
and  the  Directors  may  grant  to  the  original  mortgagor,  and 
at  his  or  her  cost  and  charges,  a  release  from  all  future  lia- 
bility in  respect  thereof. 


52  BUILDING    AND    LOAN   ASSOCIATIONS. 

SECTION  2.  It  shall  be  lawful  for  any  stockholder,  having 
executed  a  mortgage  in  favor  of  the  Association,  to  substitute, 
at  his  or  her  own  expense,  and  subject  to  the  approval  of  the 
Directors,  any  other  property  as  security  to  the  Association  in 
lieu  of  that  originally  mortgaged. 

SECTION  3.  Should  any  stockholder  desire  to  have  his  or 
her  property  discharged  from  mortgage  before  the  Association 
shall  have  regularly  terminated,  he  or  she  shall  be  allowed  so 
to  do,  by  paying  into  the  hands  of  the  Treasurer  such  a  sum 
of  money  as  shall,  at  the  rate  of  premium  the  funds  are  then 
selling,  produce  the  same  monthly  payment  of  interest  as  that 
which  said  stockholder  had  been  previously  paying  in  his  or 
her  advance  ;  provided,  such  sum  shall  in  no  case  be  less  than 
the  net  amount  actually  received  by  him  or  her ;  and  provi- 
ded, further,  that  no  release  shall  be  given  until  the  money  paid 
for  such  release  shall  have  been  sold,  and  the  security  offered 
for  the  same  be  approved  by  the  Directors,  and  the  papers  con- 
nected therewith  duly  executed;  such  stockholder  paying  all  costs 
connected  with  the  redemption  of  the  mortgaged  property.* 

*  This  is  a  most  important  provision,  and  should  be  carefully  ex- 
amined and  carried  out.  It  is  of  course  desirable,  in  institutions  of 
tliis  kind,  based  upon  a  principle  of  mutual  accommodation,  to  extend 
to  individual  stockholders  every  facility  for  the  release  of  their  prop- 
erty that  is  consistent  with  the  general  interests  of  the  Association  ; 
neither,  if  possible,  should  be  made  to  suffer,  and  by  the  above  ar- 
rangement the  interests  of  both  are  fully  guarded  and  secured. 

If  a  stockholder  who  has  purchased  at  a  high  rate  of  premium, 
should  desire  to  release  his  property  when  the  funds  are  selling  at  a 
less  rate,  and  should  be  required  only  to  pay  the  net  sum  he  had  re- 
ceived as  an  advance,  it  is  evident  the  Association  would  suffer, — since 
that  sum  would  not,  at  the  reduced  rate  of  premium,  command  the 


BUILDING    AND    LOAN   ASSOCIATIONS.  53 

ARTICLE    X. 

Fines. 

In  addition  to  the  fines  mentioned  in  the  fourth  section  of 
the  first  article,  any  officer  of  the  Association,  for  neglecting 

same  monthly  interest  that  it  did  under  the  higher  rate  ;  but  if,  on 
the  other  hand,  he  be  required  to  pay  the  difference  between  the  pre- 
mium at  which  he  had  purchased,  and  the  premium  at  which  the 
funds  sell  at  the  time  his  property  is  released,  the  whole  difficulty  will 
be  at  once  obviated,  and  precisely  the  same  monthly  payment  accrue 
to  the  Association.  Nor  has  the  stockholder  any  cause  for  complaint, 
as  with  the  same  number  of  shares  he  can  purchase  from  the  Associa- 
tion at  the  reduced  rate  of  premium  an  increase  over  his  former  ad- 
vance exactly  equivalent  to  the  difference  paid  in  releasing  his  prop- 
erty. 

This  provision  will  be  more  fully  understood  by  the  following  illus- 
trations : 

Suppose  an  individual  owning  twenty  shares  to  have  bid  on  four 
thousand  dollars,  at  forty  per  cent,  premium;  this  would  be  sixteen 
hundred  dollars,  which  deducted  from  the  four  thousand  dollars,  would 
make  twenty-four  hundred  dollars  net.  He  would  be  required  there- 
after to  pay  six  per  cent,  interest  on  the  four  thousand  dollars ;  mak- 
ing the  monthly  payment  for  interest,  twenty  dollars. 

Suppose  the  same  individual  should  desire  to  release  his  property 
when  the  funds  are  selling  at  thirty  instead  of  forty  per  cent,  premi- 
um. Should  he  be  required  only  to  return  the  twenty-four  hundred 
dollars,  the  net  sum  he  had  received,  the  Association  would  be  evi- 
dently the  loser ;  for  a  stockholder  to  obtain  this  amount  at  thirty  per 
cent,  premium,  would  be  required  to  bid  only  on  three  thousand  four 
hundred  and  twenty-eight  dollars,  instead  of  on  four  thousand  dollars, 
as  in  the  former  case  when  the  premium  was  forty  per  cent. ;  the 
monthly  interest  on  three  thousand  four  hundred  and  twenty-eight 
dollars,  would  be  but  little  over  seventeen  dollars,  so  that  the  Associ- 
ation would  thus  lose  three  dollars  monthly  from  its  income.  But 
suppose  that  he  were  required  to  pay  the  difference  between  the  pre- 
mium at  which  he  purchased  and  the  rate  of  premium  the  funds  are 


54  BUILDING    AND    LOAN  ASSOCIATIONS. 

to  attend  any  of  the  annual  or  special  meetings,  shall  be  fined 
for  each  and  every  such  neglect  the  sum  of  twenty-five  cents ; 
nor  shall  such  fine  be  remitted  in  any  case  other  than  sickness 
or  absolute  necessity. 

ARTICLE   XI. 
Constitution. 

This  Constitution  can  only  be  altered  or  amended  at  an 
annual  meeting,  and  by  a  majority  of  the  votes  represented, 
or  present ;  and  at  least  one  month's  notice  of  the  proposed 
alteration  must  be  publicly  given. 

selling  at  the  time  his  property  is  released, — in  other  words,  the  dif- 
ference between  forty  and  thirty  per  cent ;  this  would  be  ten  per  cent, 
on  the  four  thousand  dollars,  (the  amount  of  his  bond,)  making  four 
hundred  dollars,  which  added  to  the  twenty-four  hundred  dollars 
would  be  twenty-eight  hundred  dollars,  the  required  payment  to  re- 
lease his  property.  Now  to  obtain  this  amount  net  (twenty-eight 
hundred  dollars)  at  thirty  per  cent.,  a  stockholder  would  be  re- 
quired to  bid  on  four  thousand  dollars,  the  monthly  payment  of  inter- 
est on  which  would  be  precisely  the  same  as  before,  twenty  dollars  ; 
so  that  in  this  way  the  Association  loses  nothing.  Nor  does  the  indi- 
vidual referred  to ;  for,  with  the  same  twenty  shares  he  still  holds  he 
can  purchase  at  thirty  per  cent,  twenty-eight  hundred  dollars,  instead 
of  two  thousand  dollars  in  the  former  case  at  forty  per  cent-, — making 
just  the  difference  between  the  net  sum  he  had  received  on  his  prop- 
erty, and  the  amount  required  to  release  it. 

It  thus  puts  him  and  the  Association  in  precisely  the  same  position 
as  before  ;  and  also  prevents  any  derangement  of  the  accounts,  and 
anything  like  speculation  with  the  funds  of  the  society.  An  individ- 
ual may  desire  to  release  his  mortgage  on  one  piece  of  property,  and 
purchase  another,  or  may  desire  to  effect  such  release,  and  simply  re- 
main a  shareholder  in  the  Association  without  becoming  at  once  again 
a  borrower ; — in  either  case  the  opportunity  is  thus  afforded  him. 


BUILDING    AND  LOAN    ASSOCIATIONS.  55 

ARTICLE    XII. 

Number  of  Shares. 


The  capital  stock  of  this  Association  shall  be 
shares. 


BUILDING    AND    LOAN   ASSOCIATIONS.  57 

A  PLAN  OF  BOOK-KEEPING 

FOE 

BUILDING  AND  LOAN  ASSOCIATIONS. 


THE  books  requisite  to  be  used  in  these  Associations,  are 
an  Instalment  Book,  Cash  Book,  Journal,  Ledger,  Sales  Book, 
and  Insurance  Register.  An  illustration  of  these  books,  and 
of  what  is  believed  to  bo  the  most  approved  method  of  keep- 
ing them,  is  given  in  the  following  forms.  The  rules  of  ac- 
counts which  precede  the  forms,  embrace  every  transaction 
that  is  likely  to  occur  during  the  progress  of  the  Association 
towards  its  dissolution  ;  and  prescribe  the  particular  mode  of 
entry  in  debiting  and  crediting  the  several  accounts. 

With  a  view  to  exemplify  the  process  by  which  the  affairs 
of  the  Association  are  brought  to  a  close,  the  entries  commence 
at  a  time  when  it  is  supposed  that  the  objects  for  which  the 
organization  was  formed  are  so  nearly  consummated,  that 
only  eighty  shares  remain  unpaid :  the  balances  at  the  head 
of  the  Cash,  Instalment,  Loan,  and  other  accounts,  being  as- 
sumed to  exhibit  the  state  of  these  accounts  at  the  dates  an- 
nexed. 

PERSONAL  ACCOUNTS. 

The  personal  accounts  are  those  kept  with  the  stockholders, 
in  which  they  are  debited  with  the  monthly  instalments  on  the 


58  BUILDING    AND   LOAN  ASSOCIATIONS. 

shares  held  by  them,  the  cash  received  by  them  on  account  of 
or  in  full  for  advances  made  by  the  Association,  the  premium 
given  by  them  for  the  same,  the  monthly  interest  on  bonds, 
and  such  fines  as  they  may  incur  for  non-payment  of  their 
dues :  they  are  credited  by  cash  for  all  sums  paid  the  Associa- 
tion, and  by  loans  for  the  loans  received  by  them. 

When  a  shareholder  transfers  his  shares,  he  is  debited  to 
the  transferee,  for  the  total  amount  of  instalments  paid  on  the 
said  shares ;  while  the  transferee  is  debited  to  him  for  the 
total  amount  of  instalments  charged  his  account. 

In  the  event  of  forfeiture,  the  defaulting  shareholder  is 
debited  to  Expense  Account,  or  Profit  and  Loss,  for  his  pro- 
portionate share  of  the  expenses  or  losses  of  the  Association ; 
and  to  cash  for  the  balance  refunded  him  :  he  is  credited  by 
the  purchaser  of  the  forfeited  shares  for  the  instalments  due 
on  same  at  date  of  sale.  The  purchaser  is  credited  by  cash 
for  the  par  value  of  the  shares,  provided  they  are  sold  to  him 
at  par  or  for  a  premium  ;  if  he  buys  below  par,  he  is  then 
credited  by  cash  for  the  price  actually  paid,  and  by  Profit  and 
Loss»foT  the  difference  between  the  purchase  money  and  the 
par  value. 

When  a  shareholder  returns  to  the  Association  an  advance 
received  by  him,  he  is  credited  by  cash  for  the  amount  re- 
turned, and  by  Premium  Account  for  the  difference  between 
the  cash  thus  returned  and  the  amount  of  his  bond.  He  is 
then  debited  to  Loans  for  the  whole  amount  of  the  advance' 
including  premium. 


BUILDING    AND    LOAN  ASSOCIATIONS.  59 

LOAN  ACCOUNT. 

This  account  is  debited  -for  all  advances  made  to  sharehold- 
ers, and  is  credited  for  such  advances  as  may  be  returned.  In 
closing  books  it  is  credited  by  stock. 

PREMIUM  ACCOUNT. 

This  account  is  credited  for  the  premium  given  for  loans, 
and  is  debited  for  the  same  when  a  loan  is  returned.  It  is 
balanced  by  a  debit  to  Profit  and  Loss. 

INTEREST  ACCOUNT. 

Credited  for  the  monthly  interest  on  loans,  and  debited  to 
Profit  and  Loss  in  closing  account. 

FINES. 

Credited  for  fines  incurred,  and  balanced  by  debit  to  Profit 
and  Loss. 

PREMIUM  ON  SHARES  SOLD. 

Credited  for  premium  given  for  forfeited  shares  sold,  and 
balanced  by  debiting  to  Profit  and  Loss. 

EXPENSE  ACCOUNT. 

Debited  for  all  sums  paid  for  the  expenses  of  the  Associa- 
tion, as  printing,  room  hire,  Treasurer's  salary,  &c.,  and  closed 
by  Profit  and  Loss. 


60  BUILDING   AND    LOAN  ASSOCIATIONS. 

CASH. 

Debited  with  all  moneys  received,  and  credited  for  all  pay- 
ments. If  there  should  remain  a  balance  of  cash  on  hand  at 
the  dissolution  of  the  Association,  it  is  disposed  of  by  a  pro- 
rata  division  among  the  shareholders. 

PROFIT  AND  LOSS. 

Debited  for  all  losses  sustained,  and  to  Expense  Account  for 
the  debit  balance  of  that  account :  credited  for  all  gains,  and 
by  premium,  interest,  fines,  and  premium  on  shares  sold,  for 
the  credit  balances  of  these  accounts.  It  is  balanced  by  debit- 
ing to  Stock  Account. 

INSTALMENT  ACCOUNT. 

Credited  for  the  monthly  instalments  on  the  shares :  and 
debited  to  Stock  in  closing  books. 

STOCK. 

As  the  Instalment  Account  represents  the  capital  upon 
which  the  operations  of  the  Association  are  based, — and  the 
results  of  these  operations  are  shewn  by  the  Loan  and  Profit 
and  Loss  Accounts, — the  Stock  Account  is  only  employed  for 
the  purpose  of  winding  up  the  books.  It  is  credited  by 
Profit  and  Loss  and  by  Instalment  Account,  and  is  debited 
to  Loan — this  last  account  bearing  the  same  relation  to  Stock 
that  Balance  does  in  mercantile  systems. 


^  w  ^  _  ^  H-    1 

Ledger  Folio. 

*  Posted  imme< 
\  Transferred  a 

Anderson,  Henry 
Brown,  John 
Fairmont,  A.  B. 
Loomis,  Ephraim 
Primrose,  Samuel 
Seaman,  John  R. 

SHAREHOLDERS. 

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BUILDING  AND  LOAN  ASSOCIATIONS. 


J  O  U  E  N  A  L. 

[Folio  1.] 
CHARLESTON,  So.  Ca.,  January  4th,  1852. 


3 

Sundries  to  Premium  account, 

-1 

Henry  Anderson, 

premium  on  $4,000    taken 

in  advance  by  him,  on    1st 

Inst.  at  30  per  cent. 

$1,200 

00 

2 

Sam'l  Primrose,  for  same, 

($4,000)  at  33  per  cent. 

1,32000 

$2,52000 

8 

— 

== 

= 

Loan  account     to     Sundries. 

1 

Henry  Anderson 

4  000 

on 

2 

Sam'l  Primrose 

4,00000 

8,00000 

= 

= 

February  2d. 

2 

Jno.  R.    Seaman  to  J.  Brown, 

1 

2  Instalments  paid  by   for- 

mer on  10  shares   transfer- 

red to  latter,                                   20  00 

20 

00 

1 



— 

Jno.  Brown  to  J.  R.  Seaman, 



2 

2  Instalments  charged  lat- 

ter on  10  shares  transferred 

as  above, 

20 

00 

20 

00 

1 

6th 

_ 

= 

— 

g 

Hy.  Anderson  to   Loan  acct. 

for  advance  taken  by  him,l 

on   1st  Jany.,  returned   bv 

him    on   1st  Inst.,     as  per 
Cash  Book,                              4,000 

00 

4,000 

00 

BUILDING  AND  LOAN  ASSOCIATIONS. 


65 


[Folio    2.] 

CHARLESTON,  So.  Ga.,  February  6th,  1852. 


1 

3 

3 
1 

3 
1 

2 
1 

no.  Brown  to  Premium  acct. 
Prem.  on  $4,000,  taken  in 
advance  by  him  on  1st  Inst. 
at  25  per  cent. 

$1,000 

30 

$1,000 

30 

1,000 

r'remium  acct.  to^H.  Anderson 
Prem.  on  $4,000,  deposited 
by  him    1st  Inst.  in  paymt. 
of  his  bond  sold  J.  Brown, 
at  25  per  cent. 

00 

1,000 

00 

¥ 

joan  account  to  John  Brown, 

4,000 

4,000 

00 

20 

March  1st. 
3.  Loomis  to  A.  B.  Fairmont, 
4  Instalments  on  5  shs.  for 
feited  by  latter  and  purchas 
ed  by   former, 

K 

20 

A.B.  Fairmont  to  Expense  act 
His  pro  rata  share  of  Ex 
pen  es  to  date, 

°rl 

1 

00 

1 

00 

Sundries  to  Premium  accoun 
Hy.  Anderson  for  prem.  o 
$4,000  taken  by  him  on  Is 
at  10  percent, 
Ephin/  Loomis,    for  same 

400 
400 

00 
00 

800 

00 

Loan  account  to   Sundries. 
Hy.  Anderson, 
Eph.  Loomis, 

4,000 
4,000 

0 
0 

8,OOC 

00 

6 

BUILDING  AND  LOAN     ASSOCIATIONS. 


[Folio  3.] 

CHARLESTON,  So.  Ca.,  March  3d,  1852. 


r 

c 
3 

r 

3 

G 

«. 

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4 

4 
2 
4 

4 
3 

Sundries  to  Profit  &  Loss, 
Interest  account, 
Fines         " 
Premium  " 
Do.  on  Shares  sold, 

$40,000  OC 
400 
164,94500 
500 

204,954 

00 

00 

154 

00 

Profit  &  Loss  to  Expense  acct 
Balance  of  latter  acct. 

154 

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204,800 

320,000 

00 

Sundries  to   Stock, 
Instalment  account, 
Profit  &  Loss, 

00 
00 

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320,000 

00 

Stock  to   Loan  account. 
Balance  of  former  acct. 

BUILDING  AND    LOAN  ASSOCIATIONS. 


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BUILDING  AND  LOAN  ASSOCIATIONS.  75 


THE  following  Tables  are  intended  to  show  the  operation 
of  Building  Associations  from  month  to  month,  and  the  ex- 
treme time  required  to  wind  up  at  certain  average  rates  of 
premium,  varying  from  twenty  to  fifty  per  cent. 

It  is  proper  to  observe  that  these  calculations  are  made 
upon  a  very  liberal  basis ;  a  large  margin  being  allowed  for 
expenses  and  possible  losses,  and  no  account  taken  of  fines, 
forfeitures,  and  probable  payments  for  release  of  mortgages, — 
all  of  which  greatly  tend  to  accelerate  the  winding  up  of  an 
Association.  It  may  be  safely  presumed,  that  in  each  instance, 
an  Association  at  any  of  the  rates  of  premium  here  specified, 
would  terminate  at  least  one  year  less  than  is  indicated  by 
the  respective  tables ;  their  object  being  to  show  not  the 
shortest,  but  the  longest  possible  time  that  these  societies  are 
likely  to  exist.  Several  have  already  terminated  in  this  coun- 
try, and  in  no  case,  as  far  as  we  have  been  able  to  learn,  have 
they  exceeded  six  or  six  and  a  half  years. 

It  may  here  be  suggested,  that  the  duration  of  an  Associa- 
tion may  be  shortened  several  months,  or  even  a  whole  year, 
by  a  general  agreement  among  the  shareholders,  and  a  pro 
rata  prepayment  by  them  in  advance  (according  to  their  re- 
spective claims)  of  such  a  sum  as  would  accomplish  the  objects 
of  the  organization.  Of  course  this  would  require  a  careful 


76  BUILDING    AND    LOAN  ASSOCIATIONS. 

calculation,  one  based  upon  the  precise  state  of  the  affairs  of 
the  Association  at  the  time ;  but  it  could  be  readily  made  by 
the  accountant  officer  of  the  Association,  or  any  one  familiar 
with  its  plan  of  operation. 

In  several  of  the  Associations,  North,  they  have  recently 
adopted  the  plan  of  allowing  six  per  cent,  interest  to  those  of 
their  members  who  pay  a  year's  instalments  in  advance,  or 
three  per  cent,  for  half  the  amount.  This  is  a  decided  advan- 
tage to  both  parties ;  it  will  accomplish  the  objects  of  the  As- 
sociation in  a  much  shorter  time,  and  affords  to  shareholders 
a  direct  return  for  their  investment,  apart  from  their  ultimate 
interest  in  the  profits  of  the  concern.  We  would,  therefore, 
earnestly  recommend  its  general  adoption.  While  there  are 
many  in  these  Associations  who  could  not  afford  to  make  any 
payment  in  advance,  there  are  always  some  who  would  be 
able  and  willing  to  do  it,  provided  such  an  inducement  were 
held  out  to  them. 


BUILDING    AND   LOAN  ASSOCIATIONS. 


77 


TABLE   I. 

AVERAGE  RATE  OF  PREMIUM  TWENTY  PER  CENT. 

Explanation. — In  these  tables,  two  thousand  shares  are  as- 
sumed as  the  capital  stock  of  an  Association.  The  first  column 
indicates  the  amount  actually  paid  in  each  month,  which  is 
ascertained  by  adding  to  the  amount  paid  for  shares  the  inter- 
est accruing  from  all  the  foregoing  monthly  sales  ;  the  second 
column  shows  the  increase  of  the  amount  paid  in,  at  the  ave- 
rage rate  of  premium  at  which  it  is  sold  ;  and  the  third  column, 
the  interest  accruing  from  the  increased  amount. 


1st  Year. 

Amount 
paid  in. 

Increase  at 
20  percent. 

Interest 
acc'ng. 

2d  Year. 

Amount 
paid  in- 

Increase  at 
JO  per  cent. 

[nterest 
acc'ng. 

1st  mo. 

2000.00 

2500.00 

12.50 

1st  mo. 

2155.21  2694.01 

13.47 

2d    " 

2012.50 

2515.62 

12.58 

2d  " 

2168.682710.85 

13.55 

3d  " 

2025.082531.35 

12.65 

3d  " 

2182.23 

2727.7813.63 

4th" 

2037.732547.16 

12.73 

4th" 

2195.862744.82  13.72 

oth  " 

2050.46 

2563.07 

12.81 

5th  " 

2209.582761.97 

13.80 

6th  " 

2063.272579.0812.89 

6th" 

2223.382779.22 

13.89 

7th  " 

2076.162595.20 

12.97 

7th  " 

2237.27 

2796.5813.98 

8th  " 

2089.132611.41 

13.05 

8th  " 

2251.25 

2814.06114.07 

Oth"  12102.182627.72 

13.13 

9th  " 

2265.322831.6514.16 

10th"    2115.31 

2644.13il3.22 

10th  " 

2279.482849.35:14.24 

llth"    2128.52 

2660.6513.30 

llth" 

2293.72 

2867.15  14.33 

12th"    2141.822677.27 

13.38 

1  2th" 

2308.05 

2885.06  14.42 

24812  U'»  310  3'2.G()  .155.21 

26770.03]  33462.  50  167-26 

7* 


78 


BUILDING    AND    LOAN  ASSOCIATIONS. 


TABLE  I— CONTINUED. 


3rd  Year. 

Amonnt 
paid  in- 

Inc'se  at  20 
per  cent. 

Interest 
accr'ng 

5th  Year. 

Amonnt     Inc'se  at  20 
paid  in.        percent. 

Interest 
accr'ng 

Istmo. 

2322.47 

2903.08 

14.51 

Istmo.  2696.923371.15 

16.85 

2d   " 

2336.982921.22 

14.60 

2d   " 

2713.773392.21 

16.96 

3d   " 

2351.582939.47 

14.69 

3d   " 

2730.733413.41 

17.06 

4th" 

2366.272957.83 

14.78 

4th" 

2747.793434.73 

17.17 

5th" 

2381.052976.31 

14.88 

5th" 

2764.963456.2017.28 

6th  " 

2395.93'2994.91 

14.97 

6th  " 

2782.243477.80 

17.38 

7th" 

2410.903013.62 

15.06 

7th  " 

2799.623499.52 

17.49 

8th" 

2425.963032.45 

15.16 

8th" 

2817.113521.38 

17.60 

9th" 

2441.123051.4015.25 

9th  " 

2834.71  3543.58 

17.71 

10th  " 

2456.373070.46 

15.35 

10th  " 

2852.42  3565.52 

llth  " 

2471.723089.65 

15.44 

llth  " 

2870.243587.80 

17.9:* 

12th  " 

2487.163108.95 

15.54 

12th  " 

2888.173610.21 

18.05 

• 

28847.51  36059.35:180.23 

33498.68  41873.51 

209.30 

4th  Year. 

Amonnt 
paid  in. 

Inc'se  at  20 
per  cent. 

Interest 
accr'ng 

6th  Year. 

Amonnt 
paid  in. 

Inc'se  at  20  Interest 

JKT  L-fiii. 

Istmo. 

2502.703128.37 

15.64 

Istmo.  2906.22  3632.77  18.16 

2d    " 

2518.343147.92 

15.73 

2d   "    2924.38365^.47  18.27 

3d    " 

2534.07 

3167.58 

15.83 

3d   " 

2942.653678.3118.39 

4th  " 

2549.903187.37 

15.93 

4th  " 

2961.04 

3701.42 

5th  " 

2565.83 

3207.28 

16.03 

5th  " 

2979.54 

3724.42  18.G2 

6th" 

2581.863227.32 

16.13 

Gth  " 

2998.163747.7018.73 

7th" 

2597.993247.48 

16.23 

7th  " 

3016.89:1771.1118.85 

8th"  '2614.223267.77 

16.33 

8th  " 

3035.74  3794.67  18.97 

9th" 

2630.55 

3288.18 

16.44 

9th  " 

3054.71 

3818.3819.09 

10th  " 

2646.993308.73 

16.54 

10th  " 

3073.80  3842,37  10.  i2] 

llth  « 

2663.533329.41 

16.64 

llth  " 

3093.01 

3866.2619.33 

12th  " 

2680.17 

3350,21 

16.75 

12th  " 

3112.34 

3890.41'  19.45 

31086.  15!  38857.62 

194.22 

36098.48 

45l23.r,! 

BUILDING    AND    LOAN    ASSOCIATIONS. 


TABLE   I.  — CONTINUE 


7th  Year. 

Amount 

paid  in. 

Inc'se  at  20 
per  cent. 

Interest, 
accr'ng 

9th  Year. 

Amount 
paid  in. 

Inc'se  at  20 
per  cent. 

Interest 
accr'ng 

1st  mo. 

3131.79 

3914.73 

19.57 

1st  mo. 

3636.81 

4546.01 

22.73 

2(1     " 

3151.363939.20 

19.69 

2d    " 

3659.54 

4574.42 

22.87 

3d    " 

3l7l.05i3963.81 

19.81 

3d    " 

3682.41 

4603.01 

23.01 

4th  " 

3190.863988.57 

19.94 

4th  " 

3705.42 

4631.77 

23.15 

5th  " 

3210.804014.7520.07 

5th  « 

3728.57 

4660.71 

23.30 

Cth  " 

3230.874038.5820.19 

6th  " 

3751.87 

4689.73 

23.44 

7th  " 

3251.064063.8220.31 

7th  " 

3775.31 

4719.13 

23.59 

8th  " 

3271.37 

4089.21 

20.44 

8th  " 

3798.90 

4748.62 

23.74 

9th  " 

3291.81 

4114.76l20.57 

9th  " 

3822.64 

4777.05 

23.89 

10th  " 

3312.38 

4140.4720.70 

10th  " 

3846.53 

4808.16 

24.04 

llth  " 

3333.08 

4166.3520.83 

llth  " 

3870.57 

4838.21 

24.19 

12th  " 

3353.91 

4192.38 

20.96 

12th  " 

3894.76 

4868.45 

24.34 

38900.34 

48626.  63 

248.08 

45173.3356465.27 

282.29 

8th  Year 

Amount 
paid  in. 

Inc'se  as  2( 
per  cent. 

)  Interest 
accr'ng 

I0th  Year. 

Amount 
paid  in. 

Inc'se  at2( 
per  cent. 

Interest 
ace  'ng 

1st  mo. 

3374.87 

4218.5821.09 

1st  mo. 

3919.10 

4898.87 

24.49 

2d    " 
3d    " 

3395  96 
3417.18 

4244.9521.22 
4271.4721.:).-, 

2d     " 

3d     « 
4th  " 

3943.59 
3968.23 
3993  03 

4929.48 
4960.28 
4991.28 

24.64 
24.80 
24.95 

4th-  " 

3438.53 

4298.16 

21.49 

15823  95 

IQTTQ  01 

9888 

5th  " 

3460.02 

4325.02:21.62 

6th  " 

3481.64 

4352.05 

21.76 

Years. 

Am'tp'din. 

Inc.  20  p.  c.  Int.  ace. 

7th  " 

3503.40 

4379.25 

21.89 

1st  y'r. 

24842.16 

31052.66  155.21 

8th  " 

3525.29 

4406.61 

22.03 

2d     « 

26770.03 

33462.50 

167.26 

9th  " 

3547.32 

4434.15 

22.17 

3d     " 

28857.51 

36059.35 

180.23 

10th  " 
llth  " 

3569.49 
3591.79 

4461.87 
4489.73 

22.30 
22.44 

4th  " 
5th  « 
6th  " 

31086.15 
33498.68 
36098.48 

38857.62 
41873.51 
45123.30 

194.22 
209.30 
225.57 

12th  "    3614.23 

4517.78 

22.587th  " 

38900.34 

48626.63  243.08 

8th  " 

41'.>1<>.72 

52899.62 

261.94 

141919.72 

52399.62 

2G1.94 

9th  " 
4  mos. 

46178.38 

15823.95 

56465.27 
19779.91 

282.29 
98.88 

Totali322960.35  403700.27 

2017.98 

80  BUILDING  AND    LOAN    ASSOCIATIONS. 

TABLE   II. 

AVERAGE  PREMIUM    TWENTY-FIVE  PER  CENT. 


1st  Year. 

Amount 

pail  M. 

Fncrease  at 
25  per  cent. 

Interest 
acc'ng. 

3d  Year. 

Amount 
paid  in. 

Increase  at 
t'5  per  cent. 

Interest 
acc'ng. 

Istino. 

2000.00 

2666.66 

13.33 

1st  mo. 

2345.70 

3127.60 

15.63 

2d  " 

2013.33 

2684.44 

13.42 

2d  " 

2361.333148.44 

15.74 

3d  " 

2026.75 

2702.3313.51 

3d  " 

2377.073169.42 

15.84 

4tli  " 

2040.26 

2720.34 

13.60 

4th  " 

2392.91 

3190.54I15.95 

5th" 

2053.86 

2738.4813.69 

5th  " 

2408.86  3211.8l|l6.05 

6th  « 

2067.55 

2756.73 

13.78 

6th  " 

2424.91  3233.21  10.10 

1th  " 

2081.33 

2775.1013.87 

7th  " 

2441.07 

.7616.27 

8th  " 

2095.20 

2793.60'  13.96 

8th  " 

2457. 

3276.45 

16.38 

9th  " 

2109.162812.21  14.00 

9th  " 

2473.72  3298.29 

16.49 

10th" 

2123.22,2830.96 

14.15 

10th  " 

2490.21 

3320.29 

16.60 

llth" 
12th" 

2137.37 
2151.61 

2849.82 
2868.80 

14.24 
14.34 

llth" 
12th" 

2506.81  13342.42 
2523.523364.69 

16.71 
16.82 

24899.64  33199.47  165  95 

29203.45  38937.92  194.64 

2d  Year. 

Amount     fncrease  at 
paid  jn.     L'5  per  cent. 

fnterest 
acc'ng. 

4th  Year. 

Amonnt    'increase   at 
paid  in.     .5  per  cent. 

Interest 
acc'ng. 

1st  mo.  2165.  95 

2887.93 

14.44 

1st  mo. 

2540.34 

3387.12 

16.93 

2d   " 

2180.39 

2907.18 

14.54 

2d  " 

2557.27 

3409.6917.04 

3d  " 

2194.93 

2926.57 

14.63 

3d  " 

2574.31 

3432.41 

17.16 

4th  " 

2209.56 

2946.08 

14.73 

4th  " 

2591.47 

3455.29 

17.27 

5th" 

2224.292965.72 

14.83 

5th  " 

2608.74 

3478.32 

17.39 

6th" 

2239.12 

2985.49 

14.93 

6th  " 

2626.13 

3501.5017.50 

7th  " 

2254.05 

3005.4015.02 

7th  « 

2643.63  3524.84  17.62 

8th" 

2269.07 

3025.02 

15.12 

8th  " 

2061.25 

3548.33 

17.74 

9th  " 

2284.19 

3045.58 

15.23 

9th  " 

2678.99 

3571.85 

17.86 

10th  " 

2299.42 

3065.89 

15.32 

10th  " 

2696.85 

3595.80 

17.97 

llth" 

2314.74 

3086.32!  15.43 

llth" 

2714.823619-76 

18.09 

12th" 

2330.17 

310G. 

15.53 

12th" 

2732.9i;3643.88 

18.21 

26965.88 

3595407 

179.75 

31026.71  42168.79:210.78 

BUILDING   AND  LOAN    ASSOCIATIONS. 


81 


TABLE    II.  — CONTINUED. 


5th  Year. 

Amount 
paid  in. 

Increase  at, 
25  per  cent. 

Interest 
acc'ng. 

7th  Year. 

Amount 
paid  in. 

Increase  at 
25  per  cent. 

fnterest 
acc'ng. 

1st  mo. 

2751.12 

3668.16 

18.34 

1st  mo. 

3226.65 

4302.20 

21.51 

2d  " 

2760.46 

3692.61 

18.46 

2d  " 

3248.16 

4330.88 

21.65 

3d   " 

2787.92 

3717.22 

18.58 

3d  " 

3269.81 

4359.74 

21.79 

4th" 

2806.50 

3742.00 

18.71 

4th" 

3291.60 

4388.80 

21.94 

5th  " 

2825.213766.94 

18.83 

5th  " 

3313.54 

4418.05 

22.09 

6th" 

2844.04 

3792.05 

18.96 

6th" 

3335.63 

4447.50 

22.23 

7th" 

2863.00 

3817.33 

19.08 

7th" 

3357.86 

4477.1422.38 

8th" 

2882.083842.77 

19.21 

8th" 

3380.24 

4506.9822.53 

9th" 

2901.29 

3868.38 

19.34 

9th  " 

3402.77 

4537.02 

22.68 

10th  " 

2920.633894.17 

19.47 

10th" 

3425.45 

4567.26 

22.83 

llth" 

2940.103920.13 

19.60 

llth" 

3448.284597.70 

22.98 

12th" 

2959.70 

3946.26 

19.73 

12th" 

3471.26 

4628.34 

23.14 

34251.05 

456(58.02228.31 

40171.25 

53561.61267.75 

6th  Year. 

Amount 
paid  in. 

fncrease  atlnterest 
25  per  cent,  acc'ng. 

th  Year. 

Amount 
paid  in. 

Increase  at 
25  per  cent. 

Interest 
acc'ng. 

Istino. 

2979.433972.5719.86 

1st  mo. 

3494.40 

4659.20 

23.29 

2d  " 

2999.^1) 

3999.0519.99 

2d  " 

3517.69 

4690.25 

23.45 

3d  " 

3019.28 

4025.7020.12 

3d  " 

3541.14 

4721.52 

23.60 

4th" 

3039.40 

4052.5320.26 

4th" 

3564.74 

4752.98 

23.76 

5th  " 

3059.66 

4079.54l20.39 

5th" 

3588.50 

4784.66 

23.92 

6th" 

3080.05 

4106.7320.53 

6th  " 

3612.42 

4816.56 

24.08 

7th" 

3100.58 

4134.10!20.67 

7th" 

3636.50 

4848.66 

24.24 

8th" 

3121.25 

4161.6620.80 

8th  " 

3660.744880.98 

24.40 

9th" 

3142.05 

4189.4020.94 

9th" 

3685.144913.52 

24.56 

10th" 

3162.99 

4217.3221.08 

10th" 

3709.70 

4946.26 

24.73 

llth" 

3184.07 

4245.42l21.22 

llth" 

3734.434979.24 

24.89 

12th  " 

3205.29 

4273.7221.36 

12th" 

3759.32 

5012.42 

25.06 

37093  34 

49457.74i247.22 

43504.72 

58006.25 

289.98 

82 


BUILDING    AND   LOAN  ASSOCIATIONS. 


TABLE    II.  — CONTINUED. 


9th  Year. 

Amount 
paid  in. 

Increase  al 
25  per  cent. 

Interest 
acc'ug. 

Years. 

Amt.  paid  in 

Increase  at  25 
percent. 

Interest 
accruing. 

1st  mo. 

3784.38 

5045.84 

25.23 

1st  yr. 

24899.64 

33199.47 

165.95 

2d  " 

3809.61 

5079.48 

25.39 

2d" 

26965.8835954.07 

179.75 

3d  " 

3835.00 

5113.3325.563d  " 

29203.4:, 

38937.92 

194.64 

4th" 

3860.56 

5147.41 

25.73 

4th  " 

31626.71 

42168.79 

210.78 

5th" 

3886.295181.72 

25.90 

5th" 

34251.05 

45668.02 

228.31 

6th" 

3912.195216.2526.08 

6th" 

37093.34 

K»4.-,7.  74 

247.22 

7th  " 

3938.27 

5251.02 

26.25 

7th" 

40171.  •_'.-) 

53561.01 

267.75 

8th  " 

3964.52 

5286.02 

26.43 

8th  " 

48504.72 

58006.25 

289.98 

9th  " 

3990.95 

5321.26 

26.60 

9  mos. 

34981.77 

46642.33 

233.17 

84981.71 

46642.33 

233.17 

Total. 

302697.81 

403596.20 

2017.55 

TABLE   III. 

AVERAGE   PREMIUM   THIRTY   PER    CENT. 


1st  Year. 

Amount 
paid  in. 

Increase   ai 
30  percent. 

Interest 
acc'ng. 

2d  Year. 

Amount 
paid  in. 

Increase  at 
30  per  cent. 

Interest 
acc'ng. 

1st  mo. 

2000.00 

2857.14 

14.28 

Istmo. 

2178.30 

3111.8515.56 

2d  " 

2014.28 

2877.54 

14.38 

2d  " 

2193.86 

3134.0815.67 

3d  " 

2028.66 

2898.08 

14.49 

3d  " 

2209.53 

3156.4715.78 

4th" 

2043.15 

2918.78 

14.59 

4th" 

2225.31 

3179.01 

15.89 

5th" 
6th" 

2057.74 
2072.43 

2939.62 
2960.61 

14.69 
14.80 

5th" 
6th" 

2241.20 

2257.20 

3201.71  16.00 
3224.5716.12 

7th  " 

2087.23 

2981.75 

14.91 

7th" 

2273.32 

3247.60 

16.24 

8th  " 

2102.14 

3003.05 

15.02 

8th" 

2289.56 

3270.80 

16.35 

9th" 

2117.16 

3024.51 

15.12 

9th  " 

2305.91 

3294.15 

16.47 

10th" 

2132.28 

3046.11 

15.23 

10th" 

2322,38 

3317.68 

16.59 

llth" 

2147.51 

3067.87 

15.34 

llth" 

2338.97 

3341.38 

16-71 

12th" 

2162.85 

3089.78 

15.45 

12th" 

2355.68 

3365.25 

16-83 

24965.43i35664.84 

178.30 

27191.22 

38844.55  194.21 

BUILDING   AND  LOAN    ASSOCIATIONS. 


83 


TABLE    III.  — CONTINUED. 


3d  Year. 

Amount   Increase  at 
paid  in.     30  per  cent. 

i 

Interest 
acc'ng. 

5th  Year. 

Amount 
paid  in. 

Increase  at 
30  per  cent. 

Interest 
acc'ng. 

1st  mo.  2372.51  3389.30 

16.95 

1st  mo. 

2814.47 

4020.67 

20.10 

2d  "    2389.463413.51 

17.07 

2d  " 

2834.57 

4049.3820.25 

3d  " 

2406.533437.90 

17.19 

3d  " 

2854.82 

4078.31  20.39 

4th" 

2423.723462.45 

17.31 

4th" 

2875.21 

4107.4420.54 

5th" 

2441.033487.18 

17.43 

5th" 

2895.75 

4136.78 

20.68 

6th" 

2458.463512.08 

17.56 

6th" 

2916.434166.3220.83 

7th" 

2476.023537.17 

17.69 

7th" 

2937.264196.08 

20.98 

8th" 

2493.71  3562.44il7.81 

8th" 

2958.24 

4226.0521.13 

9th" 

2511.52!3587.88 

17.94 

9th" 

2979.37 

4256.2421.28 

10th" 

2529.463613.51 

18.07 

10th  " 

3000.65 

4286.64 

21.43 

llth" 

2547.533639.32 

18.20 

llth" 

3022.08 

4317.25 

21.59 

12th" 

2565.733665.32 

18.33 

12th" 

3043.67 

4348.10 

21.74 

29615.68J42308.06 

[211.65 

35132.52 

50189.26  250.94 

4th  Year. 

Amount 
paid  in. 

Increase  at 
30  per  cent 

Interest 
acc'ng. 

Cth  Year. 

Amount 
paid  in. 

ncrease   at 
10  per  cent. 

Interest 
acc'ng. 

Istino. 

2584.06 

3691.51 

18.46 

1st  mo. 

3065.41 

4379.15 

21.90 

2d  " 

2602.52 

3717.88 

18.59 

2d  " 

3087.31 

4410.44 

22.05 

3d  " 

2621.11 

3744.44 

18.72 

3d  " 

3109.36 

4441.94 

22.21 

4th" 

2639.83 

3771.18 

18.86 

4th" 

3131.57 

4473.67 

22.37 

5th" 

2658.69 

3798.12 

18.99 

5th" 

3153.94 

4505.62 

22.53 

6th" 

2677.68 

3825.25 

19.13 

6th  " 

3176.47 

4537-81 

22.69 

7th" 

2696.81 

3852.58 

19.26 

7th" 

3199.16 

4570.22 

22.85 

8th" 

2716.07 

3880.10 

19.40 

8th" 

3222.01 

4602.87 

23.01 

9th" 

2735.47 

3907.81 

19.54 

9th" 

3245.02 

4635.74 

23.18 

10th" 

2755.01 

3935.72 

19.68 

10th" 

3268.20 

4668.85 

23.34 

llth" 

2774.69 

3963.84 

19.82 

llth" 

3291.54 

4702.20 

23-51 

12th" 

2794.51 

3992.14 

19.96 

12th" 

3315-05 

4735.78 

23.68 

32256.45 

46080.57 

230.4 

38265.04 

54664.29 

273.32 

84 


BUILDING   AND   LOAN  ASSOCIATIONS. 


TABLE    III.— CONTINUED. 


7th  Year. 

Amount 

paid  in. 

Increase  ai 
30  per  cent. 

Interest 
acc'ng. 

8th  Year. 

Amount 
paid  in. 

Increase  at 
30  per  cent. 

Interest 

am'aff. 

1st  mo.  3338.73:4769.61 

23.85 

1st  mo. 

3636.44 

5194.91    25.97 

2d  " 

3362.584803.68 

24.02 

2d  " 

3662.41 

5232.01    L'U.H, 

3d  " 

3386.60;4838.00 

24.19 

3d  " 

3688.57 

5269.38    26.35 

4th" 

3410.794872.55 

24.36 

4th  " 

3714.92 

5307.02,  26.54 

5tli  " 

3435.154907.35 

24.54 

5th" 

3741.46 

:>6.72 

6th" 

3459.69!4942.41  24.7J 

6th" 

3768.18 

5383.11    26.92 

7th" 

3484.404977.71 

24.89 

7th  " 

3795.10 

5421.57 

27.11 

8th" 

3509.29  5013.27  •_•:,.(  »7 

8th" 

3822.21 

5460.30 

27.30 

9th" 

3534.36 

5049.0825.25 

9th" 

3849.51 

5499.30 

27.50 

10th" 

3559.61 

5085.15 

25.43 

10th" 

387701 

5538.58    27.69 

llth" 

3585  01 

5121.48 

25.61 

llth"    3904.70 

5578.14 

27.89 

12th  " 

3010.055158.0725.78 

12th" 

3932.59 

5617.98    28.09 

41676.89  59538.36  '21)7.71 

45393.ll1 

64847 

9th  Year. 

Amount 

paid  in- 

fncrease   at 
30  per  cent. 

Interest 

acc'ng. 

Years. 

Amount 
paid  in. 

30  per  cent. 

Interest 
acc'ng. 

1st  mo. 

3960.68;5658.11 

28.29 

1st  yr. 

24965.43 

35664.84178.30 

2d  " 

3988.97 

5698.52 

28.49 

2d  " 

27191.2238844.55194.21 

7949.6511135663 

56.78 

3d  " 

29615.68 

42308.06U211.55 

4th" 

32250.4.") 

46080.5; 

230.41 

5th  " 

35132.52!50189.26 

250.94 

6th" 

38265.04'54664.29 

278.82 

7th  " 

41676.8959538.36 

297.71 

8th" 

45393.1064847-24 

324.24 

2mos. 

7949-65 

11356-63 

56.78 

Total. 

282445.  98  i  403493.  80 

2018.46 

BUILDING  AND  LOAN  ASSOCIATIONS. 


85 


TABLE    IV. 

AVERAGE  PREMIUM  THIRTY-FIVE  PER  CENT. 


1st  Year. 

Amount 
paid  in. 

| 

Inc'se  at  35  Interest 
percent,    ace'ii^. 

3rd  Year. 

Amount 
paid  in. 

Inc'se  at  35 
per  cent. 

Interest 
accr'ng. 

1st  mo. 

2000.00 

3076.9215.38 

1st  mo. 

2403.82 

3698.18 

18.49 

2d   " 

2015.38 

3100.58  15.50 

2d    " 

2422.31 

3726.63 

18.63 

3d   " 

2030.88 

3124.43  15.G2 

3d   " 

2440.94 

3755.29 

18.78 

4th" 

2046.50 

3148.46 

15.74 

4th  " 

2459.72 

3784.18 

18.92 

5th" 

2062.24 

3172.69 

15.86 

5th  " 

2478.64 

3813.29 

19.07 

6th" 

2078.10 

3198.16  15.99 

6th  " 

2497.71 

3842.32 

19.21 

7th" 

2094.09 

3221.67 

16.11 

7th  " 

2516.923872.18 

19.36 

8th" 

2110.20 

3246.46 

16.23 

8th" 

2536.283901.96 

19.51 

9th" 

2126.43 

3271.43 

16.36 

9th" 

2555.793931.98 

19.66 

10th  " 

2142.79 

3296.60 

16.48 

10th  " 

2575.453962.23 

19.81 

llth  " 

2159.27 

3321.95 

16.61 

llth" 

2595.26 

3992.86 

19.96 

12th  " 

2175.88 

3347.50 

16.74 

12th" 

2615.22 

4023.41 

20.12 

25041.76 

38526.85 

192.62 

30098.06 

46304.51 

231.52 

2nd  Year. 

Amount 
paid  in. 

Inc'se  at  35 
per  cent. 

Interest 
accr'ng. 

4th  Year. 

Amount 
paid  in. 

Inc'se  at  35 
per  cent. 

Interest 
accr'ng. 

1st  mo. 

2192.62 

3373.41 

16-87 

1st  mo. 

2635.34 

4054.36 

20.27 

2d    " 

2209.49 

3399.21 

17.00 

2d   " 

2655.61 

4085.55 

20.43 

3d    " 

2226.49 

3425.36 

17.13 

3d  " 

2676.04 

4116.98 

20.58 

4th  " 

2243.62 

3451.72 

17.26 

4th" 

2696.62 

4148.64 

20,74 

5th  " 

2260.88 

3478.27 

17.39 

5th" 

2717.36 

4180.55 

20.90 

6th  " 

2278.27 

3505.03 

17.53 

6th" 

2738.26 

4212.70 

21.06 

7th  " 

2295.80 

3532.00 

17.66 

7th" 

2759.32 

4245.10 

21.23 

8th  " 

2313.46 

3559.16 

17.80 

8th  " 

2780.55 

4277.76 

21.39 

9th  " 

2331.26 

3586.55 

17.93 

9th" 

2801.94 

4310.67 

21.55 

10th  " 

2349.19 

3614.  33 

18.07 

10th" 

2823.49 

4343.83 

21.72 

llth  " 

2367.26 

3641.93 

18.21 

1  1th  " 

2845.21 

4377.23 

21.89 

12th  " 

2385.47 

3669.95 

18.35 

12th" 

2867.10 

4410.92 

22.05 

27453.81 

42236.72 

211.20 

32996.84 

50764.29 

253.81 

86 


BUILDING  AND  LOAN  ASSOCIATIONS. 


TABLE    IV.— CONTINUED. 


5th  Year. 

Amount 
paid  iu. 

Inc'se  at  35  Interest 
percent-     accr'ng. 

7th  Year. 

Amount 

paidin. 

Inc'se  at  35 

per  cent. 

Interest 
accr'ng  . 

1st  mo. 

2889.15 

4444.84 

22.22 

lstmo.'3472.49 

5342.20 

26.71 

2d   " 

2911.37 

4479.0322.40 

2d   " 

3499.20 

5383.38 

26.92 

3d   " 

2933.774513.49 

22.57 

3d   " 

3526.12 

5424.80 

27.12 

4th" 

2956.34 

4548.21 

22.74 

4th  " 

3553.24 

5400.5-2 

27.33 

5th  " 

2979.084583.  20  -J-J.  Di' 

5th" 

3580.575508.5627.54 

6th" 

3002.00 

4618.4623.09 

6th  " 

3608.11 

5550.  9  :<  2  7.  7  5 

7th" 

3025.09 

4653.98 

23.27 

7th" 

3635.865593.6327.97 

8th" 

3048.36 

4689.78 

23.45 

8th" 

3663.83 

5636.66 

28.18 

9th" 

3071.81 

4725.86 

23.63 

9th  " 

3692.01 

5680.01 

28.40 

10th  " 

3095.44 

4762.21 

23.81 

10th  " 

3720.41 

5723.70 

28.62 

llth  " 

3119.25 

4798.84 

23.99 

llth  " 

3749.03 

5767.73 

28.84 

12th  " 

3143.24 

4835.75 

24.18 

12th  " 

3777.87 

5812.10 

29.06 

36174.90 

55653.65 

278.27 

43478.74 

66890.31  334.44 

(6th  Year- 

Amount 

paid  in- 

Inc'se  at  35 
per  cent- 

lntore*t 
accr'ng. 

8th  Year- 

•\  nit-  ;iM  in 

1  lie-  !i")  p.  c- 

Int.  ace- 
29.28 
29.51 
•_".'.  74 
29.M 
30.20 
30.43 
30.66 

1st  mo. 

2d     " 
3th   " 
4th   " 
5th   " 
6th    « 
7th   " 

3806.93 
3836.21 
3865.72 
3895.46 
3925.43 
3955.63 
3986.06 

5856.81 
5901.86 
r.'.i  (-,.:>(•> 
5993.01 
6039.12 
6085.58 
6132.40 

Istmo. 
2d   " 
3d   " 
4th" 
5th" 
6th" 
7th" 
8th" 
9th" 
10th  " 
llth  " 
12th  " 

3167.42 
3191.78 
3216.33 
3241.07 
3266.00 
3291.12 
3316.44 
3341.95 
3367.66 
3393.57 
3419.67 
3445.98 

4872.95 
4910.43 
4948.20 
4986.26 
5024.61 
5063.26 
5102.21 
5141.46 
5181.01 
5220.87 
5261.03 
5301.50 

24.36 
24.55 
24.74 
24.93 
25.12 
25.32 
25.51 
25.71 
25.91 
26.10 
26.31 
26.51 

27371-44 

41956.04 

209.79 

Years-     i 

Isty'r. 
2d   "     : 
3d   " 
4th" 
5th  " 
6th  " 
7th  " 
7  ni'x. 

Amt.  p'd  in    Inc-  35  p-  c-  j  Int-acc- 

25041.76 

27453.81 
30098.06 
32996.84 
36174.90 
39658.99 
43478.74 
27371.44 

38526.85 
42236.72 
46304.51 
50164.29 

55653.65 
61013.79 
66890.31 
41956.04 

192.62 
211.20 
231.52 
!253.81 

!305.07 
209.79 

39658.99 

61013.79 

305.07 

Total. 

262274.54 

403346.16  2016.72 

BUILDING    AND    LOAN  ASSOCIATIONS. 

TABLE  V. 

AVERAGE  PREMIUM  FORTY  PER  CENT. 


1st  Year. 

Amount     Increase  at 
paid  in.     40  per  cent. 

Interest 
acc'ng. 

3rd  Year. 

Amount 
paid  in. 

Increase  at 
40  per  cent. 

Interest 
acc'ng. 

1st  mo.  2000.00  3333.33 

16.67 

1st  mo. 

2440.80 

4068.00 

20.34 

2d  " 

2016.673361.11 

16.81 

2cl  " 

2461.14 

4101.90 

20.51 

3d  " 

2033.483389.13 

16.95 

3d  " 

2481.65 

4136.08 

20.68 

4th" 

2050.433417.38 

17.09 

4th" 

2502.33 

4170.55 

20.85 

5th" 

2067.523445.86 

17.23 

5th" 

2523.18 

4205.30 

21.03 

6th" 

2084.753474.58 

17.37 

6th" 

2544.21 

4240.35 

21.20 

7th" 

2102.123503.53 

17.52 

7th" 

2565.41 

4275.68 

21.38 

8th  " 

2119.643532.73 

17.66 

8th" 

2586.79 

4311.31 

21.56 

9th  " 

2137.303562.16 

17.81 

9th" 

2608.354347.2521.74 

10th" 

2155.11  3591.85 

17.96 

10th" 

2630.09 

4383.4821.92 

llth" 

2173.073621.78 

18.11 

llth" 

2652.01 

4420.0122.10 

12th" 

2191.183651.96 

18.26 

12th" 

2674.11 

4456.8522.28 

25131.27  41885.40  209.44 

30670.07 

51116.76255.59 

2nd  Year. 

Amount 
paid  in- 

Inc'se  at  40 
per  cent. 

Interest 
accr'ng 

4th  Year. 

Amount 
paid  in. 

Inc'se  at  40 
per  cent. 

Interest 
accr'ng 

1st  mo. 

2209.44 

3682.4018.41 

1st  mo. 

2696.39 

4493.98 

22.47 

2d   " 

2227.85 

3713.08 

18.57 

2d   " 

2718.86 

4531.43 

22.66 

3d   " 

2246.42 

3744.03 

18.72 

3d   " 

2741.52 

4569.20 

22.85 

4th" 

2265.14 

3775.23 

18.88 

4th" 

2764.37 

4607.28 

23.04 

5th  " 

2284.02 

3806.70 

19.03 

5th" 

2787.41 

4645.68 

23.23 

6th  " 

2303.05 

3838.41 

19.19 

6th  " 

2810.64 

4684.40 

23.42 

7th" 

2322.24 

3870.40 

19.35 

7th" 

2834.06 

4723.43 

23.62 

8th" 

2341.59 

3902.65 

19.51 

8th" 

2857.68 

4762.80 

23.81 

9th" 

2361.10 

3935.16 

19.68 

9th" 

2881.49 

4802,48 

24.01 

10th  " 

2380.78 

3967.96 

19.84 

10th  " 

2905.50 

4842.50 

24.21 

llth  " 

2400.62 

4001.03 

20.01 

llth  " 

2929.71 

4882.85 

24.41 

12th  " 

2420.63 

4034.38 

20.17 

12th  " 

2954.12 

4923.53 

24.62 

27762.88 

46271.43 

231.36 

33881.75 

50  !(]•.».  r,r 

282.35 

88 


BUILDING   AND   LOAN   ASSOCIATIONS. 


TABLE   V. —  CONTINUED. 


6th  Year. 

Amount 

paid  in. 

Inc'se  at  40 
per  cent. 

fntorest 
acc'ng. 

7th  Year. 

Amonnt 
paid  in. 

Inc'se  at  40 
PIT  cent. 

Interest 
acc'ng. 

lstmo.|2978.74 

4964.5624.82 

1st  mo. 

3635.21:6058.68 

30.29 

2d    " 

3003.56 

5005.9352.03 

2d    " 

3665.50 

6109.16 

30.55 

3d    " 

3028.59 

5047.65  -J.VJ  i 

3d    " 

3696.05 

6160.0830.80 

4th  " 

3053.83 

5089.71 

25.45 

4th  " 

3726.85 

6211.41 

31.06 

5th  " 

3079.28 

5132.1325.66 

5th  " 

3757.916263.18 

31.32 

6th  " 

3104.94 

5174.9025.87 

Cth  " 

3789.236315.38 

31.58 

7th  " 

3130.81 

5218.01 

26.09 

7th  « 

3820.81  6368.01 

31.84 

8th  " 

3156.90 

5261.5026.31 

8th  " 

3852.656421.08 

32.11 

9th  " 

3183.21 

5305.3526.53 

9th  " 

3884.766474.60 

32.37 

10th  " 

3209.74 

5349.5626.75 

10th  " 

3917.136528.55 

32.64 

llth  " 

3236.49 

5394.15 

26.97 

llth  " 

3949.776582.95 

32.91 

12th  " 

3263.46 

5439.10 

27.20 

12th  " 

3982.68,6637.80 

33.19 

37429.55 

62382.55 

311.92 

45678.5576130.88 

380.66 

Vr:ir-. 

Am'tp'd  in. 

Inc.  40  p.  c. 

Int.  ace. 

6th  Year. 

paid  in. 

per  cent. 

acc'ng. 

1st  y'r. 

25131.27 

41885.40 

L'09.14 

•_M  '» 

27762.88 

46271.48 

231.36 

1st  mo. 

3290.66 

5484.43 

27.4? 

3d    " 

30670.07 

51116.76 

2d    " 

3d    " 

3318.08 
3345.73 

5530.13 
5576.21 

27.65 

27.88 

4th  « 
5th  « 
Oth  " 

33881.75 
37429  55 
41348.90 

56469.66 
6891  1.78 

282.35 
311.92 

;;  14  r.r, 

4th  « 

3373.61 

5622.68 

28.1] 

7th  " 

46578.55 

76130.88 

380.66 

5th  " 

3401.72 

5669.53 

28.35 

Total.  242802.97  403171.361  «••  -87 

6th  " 

3430.07 

5710. 

98.5fi 

7th  " 

3458.65 

5764.41  28.82 

8th  " 

3487.47 

5812.4529.0(5 

9th  " 

3516.53 

5860.8820.30 

10th  " 

3545.83 

5909.71 

29.55 

llth  " 

3575.38 

5958.96 

29.79 

12th  " 

3605.17 

6008.61 

30.04 

41348.90 

(38914.78 

344.56 

BUILDING  AND   LOAN   ASSOCIATIONS. 

TABLE   VI. 

AVERAGE  PREMIUM    FORTY-FIVE  PER  CENT. 


89 


1st  Year. 

Amouut 
pai.l  ia. 

Increase  at 
45  per  cent. 

Interest 
acc'ng. 

3rd  Year. 

Amount 
paid  in. 

Increase  at 
45  per  cent. 

Interest 
acc'ng. 

1st  mo. 

2000.00 

3636.36 

18.18 

1st  mo. 

2485.17 

4518.49 

22.59 

2d  " 

2018.18 

3669.41 

18.35 

2d  " 

2507.764559.56 

22.80 

3d  " 

2036.53 

3702.78 

18.51 

3d  " 

2530.564601.01 

23.01 

4th" 

2055.04 

3736.43ll8.68 

4th  " 

2553.57 

4642.85 

23.21 

5th" 

2073.72 

3770.4018.85 

5th" 

2576.78 

4685.05 

23.43 

6th" 

2092.57 

3804.67  19.02 

6th" 

2600.21  4727.65 

23.64 

7th" 

2111.59 

3839.2519.20 

7th" 

2623.854770.65 

23.85 

8th" 
9th" 

2130.79 
2150.16 

3874.16 
3909.38 

19.37 
19.55 

8th  " 
9th  " 

2647.704814.00 
2671.77I4857.76 

24.07 
24.29 

10th" 

2169.71 

3944.9219.72 

10th" 

2696.064901.92 

24.51 

llth" 

2189.43 

3980.7819.90 

llth" 

2720.574946.49 

24.73 

12th" 

2209.33 

4016.9620.08 

12th" 

2745.30 
31359.30 

4991.45 

24.96 

25237.05J  45885.50!229.41 

57016.88J285.09 

2nd  Year. 

Amount 
paid  in. 

Increase  at 
45  per  cent. 

Interest 
acc'ng. 

4th  Year. 

Amount 
paid  in. 

Increase  at 
45  per  cent. 

Interest 
acc'iig. 

1st  mo.  2229.41 

4053.47 

20.27 

1st  mo. 

2770.26 

5036.83 

25.18 

2d   " 

2249.68 

4090.32 

20.45 

2d  " 

2795.44 

5082.61 

25.41 

3d  " 

2270.13 

4127.50 

20.64 

3d  " 

2820.85 

5128.81 

25.64 

4th"  !2290.77 

4165.03 

20.83 

4th" 

2846.49 

5175.43 

25.18 

5th  " 

2311.60 

4202.90 

21.01 

5th" 

2872.37 

5222.49 

26.31 

6th" 

2332.61 

4241.10 

2121 

6th" 

2898.48 

5269.96 

26.65 

7th" 

2353.82 

4279.67 

21.40 

7th  " 

2924.83 

5317.87 

26.59 

8th" 

2375.22 

4318.58 

21.59 

8th" 

2951.42 

5366.21 

26.83 

9th" 

2396.81 

4357.83 

21.79 

9th  " 

2978.25 

5415.00 

27.08 

10th  " 

2418.60 

4397.45 

21.99 

10th  " 

3005.33 

5464.23 

27.32 

llth" 

2440.59 

4437.43 

22.19 

llth" 

3032.65 

5513.90 

27.57 

12th" 

2462.78 

4477.78 

22.39 

12th" 

3060.22 

5564.03 

27.82 

28132.02 

51149.06 

255.76 

34956.59 

63557.37 

317.78 

8* 


90 


BUILDING    AND    LOAN  ASSOCIATIONS. 


TABLE  VI. —  CONTINUED. 


1 

7th  Year        Amount    Inc'se  at  45 

Interest 

5th  Year. 

Amount 
paid  in. 

Inc'se  at  43  Inter  os 
percent,    acc'ng 

paid  in. 

per  cent. 
6976.54 

34.88 

1st  mo 

3837.10 

2d     " 

3871.98 

7038.12 

35.19 

1st  mo. 

3088.045614.61  28.07 

3d    " 

3907.17 

7103.94 

2d   " 

3116.11 

5665  65  28.33 

-1th     " 

716852 

35.84 

3d   " 

3144445717.1628.59 

5th     « 

8978.63 

69 

36.17 

4th  " 

3173.035769.1428.85 

19537.47 

35520.81     177-60 

5tli  " 

3201.88  5821.60  2!U  1 

Amount 

'•'<   IlltlTi'st. 

6th  " 

3230  99  5874  59  99  37 

paid  in. 

per  rent. 

7th  " 
8th" 

3260.365927.9229.64 
3290.00  5981.81  29.91 

si  vi'jir. 
(I  '  " 
d     " 

25237.05 
28182.02 
31359.80 

15885.61 
51149-01 

:>7oir,  8£ 

9th  " 
10th  " 

3319.916036.2030.18   th    " 
3350.046091.0730.465th    " 

557.87817.78 
38966.68  70848.21 

llth  " 

3380.50  6146.36  30.73  Gth    ' 

48135.9-1  78972.5* 

12th  " 

3411  23 

6202  2331  oir  nios> 

19537.  -IT  35520.81  177.«'.i) 

i              1   Total.    221024.90     402950-47   2014-75 

38966. 5370848.27i354.2J 


6th  Year. 

Amount 
paid  in. 

Inorrase  at 

15  p.  r  con 

Interest 

icc'ng. 

1st  mo. 

3442.24 

6258.61 

31.29 

2d  " 

3473.53 

6313.69 

31.57 

3d  " 

3505.10 

6372.91 

31.86 

4th" 

3536.96 

6430.83 

32.15 

5th" 

3569.11 

6489.29 

32.45 

6th" 

3601.56 

6548.29 

82.f4 

7th" 

3634.30 

6607.81 

33.04 

8th" 

3667.34 

6667.89 

33.34 

9th" 

3700.68 

6728.50 

33.64 

10th" 

3734.32 

6789.67 

33.95 

llth" 
12th" 

3768.27 
3802.53 

6851.40 
6913.69 

04.26 
34.57 

43435.94 

78972.58 

394.86 

BUILDING    AND   LOAN    ASSOCIATIONS. 


91 


TABLE   VII. 

AVERAGE  PREMIUM  FIFTY  PER  CENT. 


1st  Year. 

Amount    FIK- 
paid  in.     i>0  per  cent. 

acc'ng. 

3rd  Year. 

Amount 
paid  in. 

Increase  at 
50  per  cent. 

Interest 
acc'ng. 

1st  mo.  2000.00  4000.00  20.00 

lstmoJ2539.45 

5078.90;25.39 

2d  "  S2020.00  4040.00  20.20 

2d  " 

2564.84 

5129.6825.65 

3d  "  12040.20  4080.40!20.40 

3d  " 

2590.495180.9825.90 

4th"    2060.604121.2020.61 

4th" 

2616.395232.7826.16 

5th" 

2081.214162.4220.81 

5th"  |2642.555285.10i26.43 

6th  " 

2102.024204.0421.02 

6th" 

2668.985337.9626.69 

Tth"    2123.044246.08 

21.23 

7th"    2695.675391.3426.96 

Stli"    2144.274288.54 

21.44 

8th"    2722.635444.26 

27.22 

9th" 

2165.714331.4221.66 

9th"  12749.85 

5499.70 

27.50 

10th" 

2187.37  4374.74  2  I.  «7 

10th" 

2777.355554.70 

27.77 

llth" 

2209.244418.48 

22.09 

llth" 

2805.125610.24 

28.05 

12th" 

2231.334462.66 

22.31 

12th" 

2833.175666.34 

28.33 

25364.991  50729.98 

253.64 

32206.491  64411.98  322.05 

2nd  Year. 

Amount 
paid  in. 

Tn  crease  at 
30  per  cent. 

Interest 
acc'ng. 

4th  Year. 

Amount 
paid  in. 

Fncrease  at 
50  per  cent. 

Interest 
acc'ng. 

1st  mo. 
2d  " 
3d  " 

2253.64 
2276.18 
2298.94 

4507.28 
4552.36 
4597.88 

22,54 
22.76 
22.99 

1st  mo. 

2d    " 

3d  " 

2861.505723.00 
2890.125780.24 
2919.025838.04 

28.62 
28.90 
29.19 

4th" 

2321.93 

4643.86 

23.22 

4th" 

2948.21 

5896.42 

29.48 

5th  " 

2345.15 

4690.30 

23.45 

5th  " 

2977.69 

5955.38 

29-78 

6th  " 

2368.60 

4737.20 

23.69 

6th  " 

3007.47 

6014.94 

30-07 

7th" 

2392.29 

4784.58 

23.92 

7th" 

3037.546075.08 

30-38 

8th  " 

2416.21 

4832-42 

24.16 

8th" 

3067.92 

6135.84 

30.68 

9th" 

2440.37 

4880.74 

24.40 

9th" 

3008.606197.20 

30.99 

10th" 

2464.77 

4929-54 

24.65 

10th" 

3129596259.18 

31.30 

11  tli" 

2489.42 

4978.84 

24.89 

llth" 

3160-87 

6321  74 

31.61 

12th" 

2514.31 

5028.62 

25.14 

12th" 

3202.48 

8404.00 

32.02 

28581.81 

57163.62 

285.81 

36301.01 

72602.02 

363.02 

BUILDING    AND  LOAN  ASSOCIATIONS. 


TABLE    VII.— CONCLUDED. 


5th  Year. 

Amount 
paid  in. 

:ncrease  at  Interest 
50  per  cent,  acc'ng. 

Yean. 

Amount 
paid  in. 

[ncrease   at  Interest 
50  per  cent,  acc'ng. 

1st  mo. 

3234.50 

6469.0032.35 

1st  year. 

25364.99 

50729.98253.64 

2d  " 
3d  " 

3266.85 
3299.52 

6533.7032.67 
6599.0433.00 

2d       " 
3d       •« 
4th     « 

28581.81 
32206.49 
36301.01 

57163.62285.81 
64411.9832205 

72602.02363.02 

4th" 

3332.52 

6665.0433.33 

5th      « 

41021.81 

8204362410.26 

5th" 

3365.85 

6731.7033.66 

10  mos. 

38132.28 

7()2f>4.r>(i  381.33 

6th  " 

3399.51 

6799.0234.00 

Total, 

.  160   39l     403215.78  2016.11 

7th" 

3433.51 

6867.0234.34 

8th" 

3467.85 

6935.7034.68 

9th" 

3502.53 

7005.0635.03 

10th" 

3537.56 

7075.1235.38 

llth" 

3572.94 

7145.8835.73 

12th" 

3608.67 

7217.3436.09 

41021.81 

82043.62410.26 

6th  Year. 

Amount 
paid  in. 

Increase  at 
50  per  cent. 

Interest 
acc'ng. 

1st  mo. 

3644.76 

7289.52 

36.45 

2d  " 

3681.21 

7362.42 

36  81 

3d  " 

3718.02 

7436.04 

37-18 

4th" 

3755.20 

7510.40 

37-55 

5th" 

3792.75 

7585.50 

37-93 

6th" 

3830.68 

7661.36 

38-31 

7th 
8th 

3868.99 
3907.68 

7737.9838.69 
7815.3639.08 

9th" 

3946.76 

7893.52 

39.47 

10th" 

3986.23 

7972.46 

39.86 

38132.28 

76264.56 

381.33 

BUILDING  AND  LOAN  ASSOCIATIONS.  93 

A  FEW  PRACTICAL  HINTS  TO  THE  OFFICERS  AND  MEMBERS 
OF  BUILDING  ASSOCIATIONS. 

1.  We  would  respectfully  recommend  to  Building  Associa- 
tions, wherever  organized,  the  importance  of  securing,  if  pos- 
sible, the  protection  of  a  State  Charter.     They  can,  indeed, 
be    conducted  with   comparative  safety,  without   this   legal 
sanction,  by  deeding  the  property  to  the  Treasurer,  in  trust, 
for  the  benefit  of  the  Association  ;  but  this  requires  additional 
security  papers,  and  in  other  ways  impedes  the  practical  work- 
ing of  the  Society.     An  Act  of  Incorporation  would  obviate 
this  difficulty,  besides  creating  increased  confidence,  and  pre- 
venting any  unnecessary  litigation.     Nor  can  there  be  any 
difficulty  in  procuring  a  charter,  where  the  principles  of  these 
Associations  are  understood  ;  every  enlightened  legislator  will 
see  it  to  be  of  the  first  importance  to  encourage  such  a  scheme 
of  social  and  political  economy. 

2.  Some  care  and  judgment  should  be  exercised  in  select- 
ing officers  for  a  Building  Association.     The  Board  of  Direct- 
ors should  be  composed  of  men  of  fair  business  qualifications 
and  habits,  as  the  general  management  of  the  Society  is  confi- 
ded into    their  hands.     The  Treasurer    should   be    a  good 
accountant  and  book-keeper,  and   of  high  moral  character ; 
and  the  Solicitor  thoroughly  acquainted  with  the  investiga- 
tion of  titles,  and  with  the  laws  affecting  property. 

3.  It  is  highly  important  that  the  officers  and  members  of 
these  Associations  should  be   prompt  and  punctual  in  dis- 
charging their  respective  obligations ;  indeed,  success  depends 


94  BUILDING  AND  LOAN  ASSOCIATIONS. 

upon  the  observance  of  this  rule.  A  shareholder  should,  if 
possible,  be  prepared  to  meet  his  monthly  dues  at  their  ma- 
turity ;  and  not  subject  himself  to  the  penalty  of  a  fine,  or 
the  Association  to  the  inconvenience  growing  out  of  his  neg- 
lect ;  nor  should  there  be  any  unnecessary  delay  in  deciding 
upon  securities  j  offered  by  a  member  who  has  purchased 
an  advance,  or  in  investigating  titles,  and  drawing  up  papers 
connected  therewith. 

4.  As  the  funds  of  the  Association  are  sold  at  a  premium, 
they  may,  for  a  while,  command  a  higher  rate  than  a  stock- 
holder, who  desires  to  purchase,  may  feel  able  or  willing  to 
give ;  let  him  not,  however,  on  this  account,  be  discouraged, 
but  patiently  bide  his  time, — remembering  that  the  delayed 
date  of  the  purchase  will  shorten  the  time  for  the  additional 
payment  of  interest ;  and  further,  that  every  cent  paid  into 
the  Association  is  not  only  so  much  saved,  but  invested  in  the 
safest  possible  manner,  and  accumulating  far  more  rapidly 
than  by  any  other  mode  of  investing  small  sums. 


BCJILDING  AND  LOAN  ASSOCIATIONS. 


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